2008-06-30_REVISION - C1982056 (3)

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PeabodH Twentymile Coal Company 29515 Routt County Road #27 • Oak Creek, CO 80467 970.879.3800 June 26, 2008 RECEIVED Mrs. Janet Binns, Environmental Protection Specialist Colorado Division of Reclamation, Mining, and Safety JUN 3 0 2008 1313 Sherman Street, Room 215 Denver, Colorado 80203 Division of Reclamation. Mining and Safety (303) 866-4944 RE: Twentymile Coal Company, Eoidel Creek Mine (C-82-056) - Technical Revision (TR08- 64) for Phase II Development of the Western Mining District Dear Mrs. Binns: Twentymile Coal Company (TCC) respectfully requests CDRMS approval of a Technical Revision to our existing approved Permit, to proceed with Phase II development of mains, sub-mains, cross-cuts, and bleeders for planned future mining of the Western Mining District (WMD). The planned development activities will be limited to underground continuous-miner development, and will not require construction of any new surface facilities, involve longwall mining in the WMD, nor result in any surface subsidence. Preliminary mine development in the WMD (Panels 17 through 18 Left), was addressed in the PR06-07 Permit Revision submittal (05/11/06), with subsequent minor modifications to adjust alignment and configuration consistent with geologic controls, under TR07-63. Planned Phase II development activities will extend to, but will not include, the un-leased Federal coal reserves in Sections 21 and 22, T5N, R87W, for which a Lease-by-Application has been filed and is currently being reviewed by the Little-Snake Office of the USDI-Bureau of Land Management. TCC is involved in ongoing discussions with Cross-Mountain Ranch, LLC, the primary surface land- owner for the WMD, with the objective of obtaining a mutually beneficial surface-use/subsidence agreement, addressing the needs and concerns of both parties. Based, however on historic property transfer documents for the subject lands (included in this submittal), TCC already has full right-of- entry and use for these lands, including subsidence rights. If an agreement cannot be reached in a timely manner, TCC may find it necessary to proceed with permitting and actual mining of the WMD reserves under the historic rights. Due to practical time constraints, it is necessary to proceed with the Phase II development, however, TCC would like to allow a little more time to provide opportunity to finalize a surface land-owner agreement. We anticipate that final Phase III permitting for the WMD will address development of the Federal coal reserves (once a lease has been issued), construction of required surface facilities, and mining of the full WMD coal reserve. Approval of the Phase II development will allow TCC to maintain full coal production and employment, meet existing coal sales commitments, and develop the WMD reserves on a schedule that will provide for a smooth transition as production in the Northern Mining District (NMD) is completed and the mineable NMD reserves are depleted. •