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II. PROCEDURES AND SUMMARY OF THE REVIEW PROCESS
<br />The Colowyo Coal Company (Colowyo) applied for a Phase I Bond Release for 494.20 disturbed
<br />acres, and a Phase II Bond Release for 432.70 disturbed acres, as shown on Exhibits 1 and 2 of the
<br />SL-04 application, respectively. The mine area is located in Moffat and Rio Blanco Counties,
<br />Colorado. The bond release areas are located in the Mine's East Pit, West Pit and Section 16 Pit
<br />areas, in Moffat County, in portions of Township 3 North, Range 93 West (T3N R93W) of the 6th
<br />Principal Meridian, Sections 3, 4, 10, 11 and 16. The permit area can be found on the USGS
<br />Quadrangle 7.5 Minute Series Maps of Axial and Nine Mile Gap. The permit area and surface
<br />ownership can be found on Colowyo Permit Map 1 and the coal ownership can be found on
<br />Colowyo Permit Map 2.
<br />Background
<br />The Colowyo Mine is located in northwest Colorado, approximately 25 miles north of the town
<br />of Meeker, CO and 25 miles south of the town of Craig, CO in Moffat and Rio Blanco Counties
<br />off of Colorado State Highway 13. The total permit area encompasses 12,250.95 acres.
<br />The East Pit, West Pit and Section 16 Pit mining sites lie just west of the northward flowing
<br />Goodspring (also referred to as Good Spring) Creek, which is paralleled by Colorado Highway
<br />13. The area is a gently sloping upland ranging from about 7,640 feet near the southwest corner
<br />to 6,560 feet near the northeast corner of the permit area. Valleys that cut into the upland surface
<br />are generally narrow, V-shaped, and about 250 to 500 feet deep. The topographic surface north
<br />of the East Pit, West Pit and Section 16 Pit mining sites is dominated by two ridges about two
<br />miles long, trending north-northeast, bounded by Goodspring, Taylor and Wilson Creeks.
<br />Mining operations began in 1976 with the East Pit, a multi-seam coal operation that continued to
<br />move in a southerly direction. Eight coal seams (Y, X, A, B, C, D, E, F) were mined from the
<br />East Pit, ranging in thickness from two to fifteen feet. The East Pit is nearly 6,000 feet from east
<br />to west (width), 1,000 feet in breadth (highwall to highwall), and 450 feet deep. Due to the
<br />number of coal seams, immense size of the pit, and manpower and equipment employed, pit
<br />progression was slow, with additional disturbances of approximately 40 to 50 acres per year. The
<br />East Pit reached a steady state where acreage disturbed approximately equals acreage reclaimed
<br />in any given year. However, reclamation of the East Pit disturbed areas was modified with the
<br />placement of West Pit development excess spoil. Extraction of coal from the East Pit was
<br />terminated in 2006. Currently the only ongoing operation in the East Pit is reclamation of the
<br />final cut, including backfilling and grading of the pit and highwall reduction.
<br />The still expanding, multi-seam West Pit is located to the west of the East Pit. The method of
<br />operation utilized in, and the coal seams extracted from, the West Pit are the same as those of the
<br />East Pit. The West Pit has approached the East Pit in overall size. Mining in the West Pit is
<br />advancing from north to south, paralleling the movement of the adjacent East Pit. Projected life
<br />of the West Pit is estimated to be until 2017, including potential highwall mining.
<br />Proposed Decision and Findings of Compliance 2 May 2011
<br />Partial Phase I/II Bond Release SL-04 Page 2
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