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2) <br /> <br />3) <br />10 year life of mine, with 5 year permit for ornamental stone and crusher material, and <br />another contract at the end of the initial five years. Preparing this EA could take some <br />time. In the interim, we will, consider issuing you a 1-year permit for ornamental stone <br />under the existing analysis, and a short-term (1-year or less) permit for crushing material <br />to test market. A serial number for this pending contract has been generated. It is COC <br />074302. <br />BLM is required by law to sell mineral materials for "fair market value" (43 CFR <br />3602.13). Periodically we re-assess the fair market value and adjust the royalty rate <br />accordingly. The most recent appraisal statewide mineral materials were performed in <br />2009, but did not address the specific stone produced at the Hankins quarry. In 2005 the <br />royalty for Hankins Flagstone was assessed at $14/ton. Using the producer price index <br />(PPI) for cut stone and stone products from March of 2005 to November 2009 we have <br />-- - <br />adjusted- the royalty to 14.50/ton. -You have; stated-that you plan-to-use-your-waste <br />material for crusher feed. The closest material covered in the 2009 statewide appraisal <br />was riprap, at $0.70/ton ($1.04/cy). Using the producer price index for crushed and <br />broken stone from November 2008 to November, 2009 we have adjusted the royalty to <br />$0.72/ton ($1.07/CY). We feel that this amount represents the fair market value of your <br />material. These royalty amounts represent the cost for the first year only. Royalty <br />amounts for the 5 year contract will be adjusted at the time of issuance, and bi-annually <br />thereafter. If you think that the royalty amounts do not reflect the fair-market value of <br />the material, please send us a letter explaining why you think the fair market value is <br />different than calculated. <br />In 2006, BLM enacted a "cost recovery" policy for processing solid minerals actions on a <br />case by case basis (43 CFR 3000.11). This means that we are required to estimate the <br />amount it will cost to process an application and charge the customer that amount to <br />process the application. Attached to this document is a cost estimate for issuing a 1-year <br />permit for ornamental stone and crusher feed under your existing permits ($373.92), and <br />for completing a new EA for a revised 10-year mine plan and the issuance of a new 5- <br />year contract(s) for those materials ($2002.28). The cost is based on the estimated time <br />required by staff at various pay.grades (GS-9, GS--11; and-GS=12) to review and process <br />your proposal, and an indirect cost ratio of 19.7%. You have the option of hiring an <br />independent contractor to prepare the new EA and revised mine plan, but there will still <br />be a fee assessed for the time it takes BLM to review these documents. We have <br />estimated BLM's cost for reviewing a contractor prepared EA at $737.73, but you would <br />still need to pay a contractor to prepare the EA and/or the revised mine plan. Market <br />rates for contractors are between $60 and $90 per hour, and would probably require a <br />minimum of 40 hours of work, plus any additional expenses such as travel. A rough <br />estimate of the minimum cost to you if you were to use a third-party contractor is $3787. <br />Copies of the itemized cost recovery estimate are attached to this document. You have <br />30 days from the receipt of this letter in which to review and comment on the proposed <br />2 of 3