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<br />MOUNTAIN COAL
<br />ACOMPANVL.L.C.
<br />A Subsidiary of Arch Westem Bituminous Group, LLC
<br />May 12, 2011
<br />Mr. Tom Kaldenbach
<br />Colorado Division of Reclamation, Mining and Safety
<br />1313 Sherman Street, Room 215
<br />Denver, CO 80203
<br />West Elk Mine
<br />P.O. Box 591
<br />5174 Highway 133
<br />Somerset, CO 81434
<br />(970) 929-2200
<br />Fax (970) 929-5050
<br />
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<br />Re: Mountain Coal Company, LLC, West Elk Mine; Permit No. CO-80-007; Request for Phase I Bond
<br />Release, Exploration and Methane Drainage Well Pads and Roads in the Dry Fork of Minnesota Creek
<br />and West Flatiron Areas
<br />Dear Mr. Kaldenbach:
<br />Mountain Coal Company, LLC (MCC) requests Phase I Bond Release for methane drainage well
<br />(MDW) and exploration sites and roads that have been reclaimed in the Dry Fork of Minnesota Creek
<br />and West Flatiron areas (see Table 1). These sites are located within an area that covers
<br />approximately 10,000 acres of private and National Forest System lands located in portions of Sections
<br />14, 15, 22, 23, 26, 27, 34, 35 and 36, Township 13 South, Range 90 West, and in Sections 1 and 2,
<br />Township 14 South, Range 90 West. These drill sites and roads were necessary for coal exploration
<br />and mine methane drainage over the past fifteen year.
<br />MCC's mining and reclamation permit was originally issued by the CDRMS in July 1981, and was
<br />reissued August 1986, January 1993 (effective August 1991), July 1996, July 2001 and July 2006. The
<br />current five-year permit term expires July 31, 2011, and MCC has submitted a complete application for
<br />successive permit renewal. MCC's five-year permit area contains lands in Sections 9-11, 13-36, T13S,
<br />R90W, 6th PM; and Sections 23-26, T13S, R91W, 6th PM, and Sections 1-5, 8-12, T14S, R90W, 6th
<br />PM in Delta and Gunnison Counties. The location of the lands can be found on the USGS 7.5 minute
<br />Somerset and Minnesota Pass Quadrangle Topographic Maps. The current permit area encompasses
<br />approximately 17,154.9 acres.
<br />MCC holds reclamation surety bonds from St. Paul Fire and Marine Insurance Company and Bond
<br />Safeguard Insurance Company (Bond numbers 40OKFO887 and 5010562, respectively) totaling $15
<br />million. The reclamation cost estimates for the reclaimed sites that are part of this request are covered
<br />by these bonds. As the wells, sites, and roads proposed for Phase 1 release are part of numerous
<br />minor, technical, and permit revision applications, MCC has been unable to accurately determine the
<br />original reclamation cost estimate (including those sites in Task 703 and other tasks resulting from the
<br />Mid-term No. 6 review) and held in bond for each site. MCC requests the CDRMS' assistance in
<br />determining the appropriate reclamation cost estimate and the resulting amount of bond withheld for
<br />each site and road requested for release of reclamation bond liability.
<br />Reclamation of the various drill site locations and roads within MCC's permit were completed from 2000
<br />through 2010. This included proper plugging and abandonment of 75 drill holes, as well as backfilling
<br />and regrading of 46 drill pad locations and 8.5 miles of road. In addition, approximately 48 cumulative
<br />acres of sites and roads proposed for bond release have been revegetated using various methods of
<br />seeding, fertilizing, and mulching, including the installation of straw and erosion control matting.
<br />Per e-mail correspondence dated January 25, 2011, the CDRMS agreed that MCC's Reclamation
<br />Photograph Reports of the reclaimed MDW sites and associated roads are sufficient for documenting
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