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September 20, 2011 C- 1981 - 019 / Colowyo Coal Mine JHB <br />Inspection Topic Summary <br />NOTE: Y= Inspected N =Not Inspected R= Comments Noted V= Violation Issued NA =Not Applicable <br />R - Air Resource Protection <br />R - Availability of Records <br />R - Backfill & Grading <br />R - Excess Spoil and Dev. Waste <br />Y - Explosives <br />R - Fish & Wildlife <br />R - Hydrologic Balance <br />Y - Gen. Compliance With Mine Plan <br />R - Other <br />NA - Processing Waste <br />R -Roads <br />Y - Reclamation Success <br />R - Revegetation <br />NA - Subsidence <br />Y - Slides and Other Damage <br />Y - Support Facilities On -site <br />Y -Signs and Markers <br />NA - Support Facilities Not On -site <br />NA - Special Categories Of Mining <br />R - Topsoil <br />COMMENTS <br />This was a complete inspection conducted by Janet Bums of CDRMS. Mr. Chip Brown accompanied the <br />inspection. Mr. Tony Tennyson accompanied the inspection during the afternoon of 9/20. The weather was <br />sunny and dry. The mine is an active surface mine with two active pits; West Pit and South Taylor Pit. A <br />press release regarding sale of the mine was issued on 9/19/2011. The operator, Colowyo Coal Company L.P. <br />is not expected to change but the corporate parent will. CCC gave the inspector bond replacement forms to <br />carry to the Division for exploration permit CX- 2003 - 109 -09. <br />AIR RESOURCE PROTECTION — Rule 4.17: <br />Portions of the Main haul road were observed to be dusty on 9/20. Water trucks were spraying roadways <br />both 9/20 and 9/21. The coal storage pile at Gossard loadout became dusty during the inspection. An alarm was <br />sounded with operations and CCC personnel were resolving a blockage in the load out system. <br />AVAILABILITY OF RECORDS — Rule 5.02.4(1): <br />Records were checked in the environmental office. Checklist accompanies this report. <br />NPDES monitoring records for East Taylor pond show a marked increase in EC between July 14, 2011 (534 uS), <br />July 20, 2011 (549 uS), and July 26, 2011 (4357 uS), yet flow during this time frame remained relatively steady; <br />0.02 cfs to 0.07 cfs. No explanation regarding this increase in EC is recorded on the report sheets. The pond was <br />cleaned of sediment after the 7/26/2011 sample. The report dated August 15, 2011 shows 4451 uS, with a 0.07 cfs <br />dischrge, yet August 24, 2011 reports the EC as 4.61 uS, and 0.02 cfs. The Division questions whether this order <br />of magnitude variance is due to reporting error of the units. CCC needs to investigate the variances and explain <br />why there are drastic conductivity variances from week to week. These extreme fluctuations were not noted on <br />results from the WestTaylor pond, or Streeter pond during this same reporting period. East Taylor, West Taylor <br />and Streeter ponds were the only ponds with reportable discharge during the time period. <br />BACKFILL and GRADING — Rule 4.14 <br />Contemporaneous Reclamation 4.14.1; Approximate Original Contour 4.14.2; Highwall Elimination <br />Number of Partial Inspection this Fiscal Year: 1 <br />Number of Complete Inspections this Fiscal Year: 1 <br />Page 2 of 9 <br />