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STATE OF COLORADO <br />DIVISION OF MINERALS AND GEOLOGY <br />Department of Natural Resources <br />1:313 Sherman St., Room 215 <br />Denver, Colorado 80203 <br />Phone: (303) 866-3567 <br />FAX: (30:3) 832-8106 <br />DATE: November 25, 1997 <br />DEPARTMENT OF <br />NATURAL <br />RESOURCES <br />Roy Romer <br />Governor <br />James S. Lochhead <br />Executive Director <br />Michael B. Long <br />TO: Harry Ranney Division Director <br />FROM: Erica Crosby' v <br />RE: Chimney Rock Mine (C-81-023) <br />AVS; Deny Recommendation <br />Harry, I received the AVS/OSM recommendation for the Chimney Rock Mine permit renewal. <br />OSM provided a recommendation of "other." The recommendation of "other" means that OSM <br />checked the accuracy of system data and the availability of any additional data, but because of <br />the recent court decision O*,cannot recommend a permit block. OSM will only provide states <br />with "deny" or "conditional issue" recommendations only when the applicant or any surface coal <br />mining operation owned or controlled by the applicant is in violation. The court's ruling <br />effectively eliminates OSM's ability to permit block an applicant solely on the basis of unabated <br />violations attributed to individuals and entities that own or control the applicant. <br />OSM has interim rules in place regarding ownership and control. Until the AVS issues and <br />ownership and control rules are settled, we will default to the system recommendation of "deny." <br />There are nine violations associated with Barrenshe Coal Inc., a company linked to Kaiser <br />Ventures through Reynold C. MacDonald. The Chimney Rock permit pages list MacDonald as a <br />director of Kaiser Ventures. MacDonald is also a controller of Olga Coal Co. who owns <br />Barrenshe Coal Inc. There are seven state violations, one bond forfeiture and one audit violation. <br />See attached reports for further detail. The operator needs to take care of these outstanding <br />violations prior to approval of the renewal application. <br />Enclosure(s) <br />cc: Larry Routten