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the office area and the portal bench area. The two-level portal bench area includes a mine conveyor to a
<br />portal-mouth screen and crusher, which feeds product coal onto a stacker conveyor. Coal is stockpiled
<br />on the lower level bench and loaded into trucks for transport to market. Facilities on the upper level
<br />mine bench include four portal entries, including the fan portal and conveyor portal, water and fuel
<br />tanks, support trailers, a shop, a transformer and substation, ventilation fan, and rock dust bin. Coal is
<br />mined underground using room and pillar techniques. Maximum annual coal production is 500,000
<br />tons, with a projected production of 300,000 to 500,000 tons per year.
<br />Permitting History
<br />Initial site development work at the McClane Canyon Mine (McClane) was conducted under a USGS
<br />approved exploration plan effective December, 1976. The Colorado Mined Land Reclamation
<br />Division (now the Colorado Division of Reclamation, Mining and Safety) issued a three year
<br />permanent regulatory program permit on April 6, 1982, for a 248 acre permit area. The existing
<br />access/haul road and the portal bench face-up developments were in place prior to issuance of the
<br />1982 permit, and no topsoil had been salvaged from these areas. This permit was renewed on July 5,
<br />1985, for an additional three year permit term. The mine was in temporary cessation from January
<br />17, 1984 to November 17, 1988, when coal production was resumed. On January 27, 1992, the
<br />permit was renewed for a five year term.
<br />The 1992 renewal incorporated a permit revision which added 2,312 acres to the permit area, and
<br />proposed construction of a haul road which would connect the McClane Canyon permit area to the
<br />adjacent Munger Canyon permit area, (both mines are operated by the same permittee). There were
<br />relatively brief periods of coal production between 1992 and 1999, but for much of this time the
<br />operation was in temporary cessation. On March 3, 1993, the Division approved a permit transfer
<br />[Succession of Operator (SO-1)] from Salt Creek Mining Company to Grand Valley Coal Company
<br />(GVCC). On December 31, 1996, the Division approved a permit renewal (RN-04) for a new five
<br />year term, expiring July 6, 2001.
<br />On August 17, 1999, the Division approved a permit transfer (SO-2) from GVCC to Lodestar Energy,
<br />Inc. (LEI). On December 1, 1999, operational status was officially changed from temporary cessation
<br />to active. LEI initiated coal extraction operations at the mine the week of February 21, 2000, and active
<br />operations have continued to the present time. To date, coal produced at the mine since operations
<br />resumed in 2000 has been trucked to the Xcel Energy Cameo Power Plant near Palisade, Colorado.
<br />LEI filed for bankruptcy on March 30, 2001, and operated the mine for a period of time as a debtor in
<br />possession. In May 2003, certain LEI assets including the McClane Canyon operation were acquired
<br />via bankruptcy auction by Central Appalachia Mining, LLC [now CAM Mining Inc. (CAM)]. On June
<br />26, 2003 the Division received an application for Succession of Operators (SO-3) to transfer the permit
<br />from LEI to CAM. The transfer was delayed due to delinquent federal lease royalty payments owed to
<br />BLM by LEI. These issues were resolved, and BLM approved assignment of the federal coal leases on
<br />11/4/04 (effective 12/1/04). The Division issued a proposed decision approving the permit transfer to
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