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STATE OF COLORADO <br />DIVISION OF RECLAMATION, MINING AND SAFETY <br />Department of Natural Resources <br />1313 Sherman St., Room 215 <br />Denver, Colorado 80203 <br />Phone: (303) 866.3567 <br />FAX: (303) 832-8106 <br />COLORADO <br />D I V I S I ON OF <br />RECLAMATION <br />MINING <br />- St- <br />SAFETY <br /> Bill Ritter, Jr. <br /> Governor <br />INTEROFFICE Harris D. Sherman <br />MEMORANDUM Executive Director <br /> Ronald W. Cattany <br /> Division Director <br /> <br />Joe Dudash <br />TO: <br />Natural Resource Trustee <br />FROM: Jim Stark - <br />SUBJECT: Bowie No. 2 Mine's 2009 Midterm Cost Estimate <br />DATE: 1 October 2009 <br />Attached is the reclamation cost estimate for the Bowie No. 2 Mine's 2009 Midterm <br />Review. The estimate is 134 tasks (a summary sheet and tasks 00a-184) and represents a <br />new liability of $9,649,116.00. This new liability is $860,461.00 more than the current <br />liability (of $8,788,655.00) and $837,846.00 more than the current bond held (of <br />$8,811,270.00). Based on the review of the reclamation cost estimate in conjunction with <br />the 2009 Midterm Review, BRL will need to submit an additional $837,846.00 in <br />bond. <br />The calculation of the new liability was an update of costs from previously completed <br />estimates that have been approved since RN-02 was approved. These estimates include <br />Permit Renewal 02,15 Minor Revisions (MR-72, MR-75, MR-78, MR-82, MR-86, MR- <br />87, MR-88, MR-92, MR-97, MR-100, MR-102, MR-104, MR-105, MR-106 and MR- <br />107) and 10 Technical Revisions (TR-44, TR-45, TR-47, TR-48, TR-49, TR-50, TR-52, <br />TR-53, TR-60 and TR-62). This estimate does not include any possible costs from TR- <br />64, which is still in the review process. <br />The reason for the increase in liability is a general increase in costs over the past few <br />years. These cost increases include equipment costs, mine and borehole sealing costs, <br />seed and reseeding costs and demolition costs (although these increases were mostly <br />offset by comparable decreases). <br />The main reason for the equipment cost increases was the hourly fuel cost. The costs <br />used in the CIRCES program come from Equipment Watch's Cost Reference Guide <br />(CRG). These costs are an average cost, as reported by contractors, for using their <br />equipment. As such, they represent a snapshot in time and the costs do lag a bit from <br />when they are reported and when they are published. The latest costs for earthmoving <br />equipment in CIRCES were from last summer, when fuel prices were topping out at over <br />office of <br />Office of Active and Inactive Mines <br />Mined Land Reclamation Denver • Grand )unction • Durango