2009-06-04_REVISION - C1980007 ‎(2)‎

• Permit No: C1980007
• IBM Index Class Name: REVISION
• Doc Date: 6/4/2009
• Doc Name: Memo Regarding Reclamation Cost Estimate Summary
• From: Tom Kaldenbach
• To: File
• Type & Sequence: TR117
• Email Name: TAK
• Media Type: D
• Archive: No

STATE OF COLORADO
DIVISION OF RECLAMATION, MINING AND SAFETY
Department of Natural Resources
1313 Sherman St., Room 215
Denver, Colorado 80203
Phone: [phone]
FAX: [phone]
MEMO
Date: June 4, 2009
From: Tom Kaldenbach
To: File
West Elk Mine, Permit C-80-007
TR-117 (Midterm Permit Review 6)
Re: Final Reclamation Cost Estimate for West Elk's MT-06
COLORADO
D I V I S ION OF
RECLAMATION
MINING
SAFETY
Bill Ritter, )r.
Governor
Harris D. Sherman
Executive Director
Ronald W. Cattany
Division Director
Natural Resource Trustee
I have finalized the reclamation cost estimate for the Midterm permit review of the West
Elk Mine (the MT-6 estimate). Prior to MT-6, West Elk's reclamation cost estimate had
most recently been updated in Permit Renewal 5 (the RN-5 estimate), using 2006 costs in
CIRCES. For the MT-6 estimate, all tasks were updated using the unit costs in CIRCES
as of early 2009, the most recent costs available.
The updated total for the estimate is $13,842,855, a decrease of $1,672,255 or 10.8%,
compared to the reclamation liability of $15,515,110 that existed upon approval of PR-14
on October 10, 2008. PR-14 added to the DRMS database future incremental bond
liability of $1,465,738. This incremental bond is to be submitted in future increments as
methane drainage wells and associated roads are developed over E-seam panels, as
approved in PR-14. Of the $1,465,738 of incremental bond, $18,781 was applied in the
recent approval of MR-352. The current actual reclamation liability for the West Elk
Mine is $12,396,264, as shown in the attached spreadsheet titled "Calculation of West
Elk Mine Excess Bond". This amount of actual liability indicates the West Elk Mine has
$2,103,736 of excess bond on deposit.
The main sources of the reduction in costs in the MT-6 estimate total $1,700,442, as
shown below in Table 1. Most hourly equipment costs have increased since the RN-5
estimate, as shown in Table 2, below. These increases partially offset the cost reduction.
Changes in task numbers and task sheets
Tasks were re-numbered in the MT-6 estimate, compared to the RN-5 estimate, in order
to group tasks by geographic area, eliminate unused task numbers, and for listing tasks in
an order nearer the likely chronological sequence of reclamation activities. Former task
numbers (from the RN-5 estimate) and new task numbers (created for the MT-6 estimate)
are cross-referenced in the MT-6 Cost Summary sheet. The percentage of liability that is
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Mined Land Reclamation Denver Grand junction • Durango Active and Inactive Mines