|
RULE 3 PERFORMANCE BOND REQUIREMENTS
<br />RULE 3 PERFORMANCE BOND REQUIREMENTS
<br />3.01 Introduction
<br />This rule sets forth the minimum requirements and responsibilities for filing and maintaining performance
<br />bonds for surface coal mining and reclamation operations. This rule includes minimum requirements for
<br />determining amounts and periods of liability for performance bonds. Likewise, it establishes minimum
<br />standards for the form, conditions, and terms for performance bonds.
<br />3.02 Performance Bond Requirements for Surface Coal Mining and Reclamation Operations
<br />Colowyo initially provided a Corporate Surety Reclamation Bond in the amount of $4,500,000 on
<br />November 4, 1982 to cover its bonding liability of $4,311,643. On January 15, 1986 Colowyo submitted a
<br />Rider to its existing bond increasing the bonded amount to $5,500,000, in response to the midterm review
<br />process.
<br />At permit renewal RN-01 Colowyo provided a Rider to the bond, effective August 21, 1987, which
<br />increased the bonded amount to $8,747,405. The calculated bond liability resulting from the August 21,
<br />1987 permit renewal and the October 1987 Bond Release approval totaled $6,814,597.
<br />The Technical Revision No. 14 for the mining of Section 11, approved by the Division January 25, 1989,
<br />required an additional bond liability of $1,314,000, resulting in a revised bonding liability of $6,814,597
<br />At that time the remaining contingency of $618,808 was left available for future consideration.
<br />The bond was then reviewed once more as. part of the PR-01 and RN-02 application of May 10, 1991.
<br />Estimated reclamation costs for the existing and planned disturbance in the East Pit, Section 16 Pits and
<br />facilities areas during the 1992-1997 permit term was calculated to be $13,412,702. Additional liabilities
<br />included $221,363 for Phase I and Phase 11 release areas and $4,117,250 for future West Pit expansion.
<br />The total liability was estimated at $17,751,315.
<br />Colowyo proposed to submit a performance bond for the permit term incrementally in accordance with
<br />the disturbance. The proposal was subsequently accepted by the Division. Effective July 8, 1992,
<br />Colowyo submitted a Corporate Surety Reclamation Bond with Seaboard Surety as Principal in the
<br />amount of $5,252,595. This bond, in combination with Bond No. 46S20380BCA provided by Aetna
<br />Casualty and Surety Company noted above, increased Colowyo's bond amount to $14 million. This $14
<br />million bond amount provided a contingency in the amount of $365,935. Colowyo provided an additional
<br />bond amount of $4,117,250 prior to initiating mining activity in the West Pit Area.
<br />During Permit Mid-Term Review (Technical Revision No. 37) Colowyo revised the estimated liability
<br />amount. On August 15, 1996 Colowyo submitted a rider to American Home Assurance Bond #14-95-65
<br />to increase that bond amount to $11,252,595. This bond, in combination with the Aetna bond noted
<br />above, provided a total reclamation bond amount of $20 million and a remaining contingency of
<br />$432,193.
<br />During 1997 Permit Renewal RN-03, Colowyo submitted TR-43 which provided for a recalculation and
<br />reduction of the performance bond for the next 5-year permit term. Due to mine plan changes for Section
<br />9, Section 15, Section 16, and the reduction in East Pit and West Pit drainage cuts, the recalculated bond
<br />amount is $15,670,521 which is $3,914,009 less than the previous estimate of $19,584,530. Note that the
<br />revised bond calculation also includes $16,723 for exploration work within the Permit Boundary
<br />(resource confirmation work, see page D-31).
<br />Rule 3 Performance Bond Requirements 3-1 Revision Date: 6/23/08
<br />Revision No.: MR-91
|