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Backeround of the Area and Colorwo <br />The Colotivyo operation is located in an area which has experienced previous mining by <br />underground methods. From historical record, two underground mines were in operation in <br />what is now the Colowyo permit area. Underground mining continued from the proposed <br />permit area until the early 1970's. <br />The underground mines which were found in the area were known as the Red Wing Mine and <br />the Streeter Mine. Coal from these underground mines was shipped to numerous locations <br />around the Rocky Mountain region with the major use of this coal being used for both <br />industrial and domestic purposes. <br />The underground coal mining in the area where Colowyo's surface mine is located began <br />around 1914 by Collum Coal Company. Federal Coal Lease D-034365 was issued to Clifford <br />Phelan in 1924. In 1945 the Lease was assigned to Colowyo Coal Company, and the name <br />was changed to the Red Wing Mine. Colowyo Coal Company developed the Red Wing Mine <br />to an annual production of 150,000 to 250,000 tons. <br />Pre-startup activities for a surface mine permit commenced in the summer of 1973. Colowyo <br />was purchased by W. R. Grace on December I, 1973. <br />Underground operations at Red Wing Mine were shut down in 1974 because of an <br />underground fire. The Hanna Mining Company entered into partnership with W. R. Grace in <br />• 1975. <br />Contracts <br />Colowyo produces a high quality, low-sulphur coal from its mining operation. <br />As of 1990, approximately 91 % of Colowyo's annual production rate of 4.5 million tons per <br />year is sold. Colowyo has long term sales contracts with Colorado-Ute, Central Power & <br />Light, and Colorado Springs Municipal Power Authority. <br /> <br />Introduction 3 <br />