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During the preceding permit term (1983-1988) the operations were modernized to allow <br /> for greater efficiency. Although the modernization program is not yet complete, the <br /> operation has changed substantially and major facets of the modernization program <br /> are operational. <br /> Coal Seams <br /> Mining operations will be conducted in the two commercially minable coal seams of the <br /> Mesaverde group located in Coal Basin. These seams are the Coal Basin seam <br /> (B-bed); and the Dutch Creek seam (Middle bed). The Middle Bed overlies the B Bed <br /> stratigraphically by about 450 feet. The coal seams are believed to be continuous, <br /> except for some faulting, within the mine plan area. <br /> The coal seams outcrop along the sides of the Basin at elevations ranging from <br /> approximately 9,500 feet to 10,700 feet. <br /> In certain locations the B Bed, the lower seam, is split by an igneous intrusion, and the <br /> lower coal portion is referred to as the A seam. <br /> Although there are other coal seams in Coal Basin, such as the Placita Seam (which is <br /> above the Middle bed), they are not considered to be commercially minable. <br /> Production <br /> The U.S. Bureau of Land Management estimates Recoverable Reserves for federal <br /> leases which Mid-Continent anticipates mining during the life of operations total <br /> 36,650,000 tons; in addition, estimated recoverable reserves of fee coal total 2,550,000 <br /> tons when calculated according to the BLM guidelines for estimation of recoverable <br /> reserves. The total estimated recoverable reserves for the life of operations at Coal <br /> Basin: 39,200,000 tons. <br /> It is anticipated that annual production will range from 700,000 to 2,500,000 tons per <br /> year of clean coal during the five-year permit term (1988 - 1993), and the total <br /> anticipated production for the 5 - year permit term is 3,500,000 to 11,500,000 tons of <br /> coal. <br /> Estimated life of the operation, assuming an annual production of 1 million tons, is <br /> approximately 39 years from the time of this permit application submittal. <br /> Rates of production and the duration of the mine life depend on market conditions and <br /> geologic factors. Geologic factors include intense faulting, igneous intrusives and the <br /> extreme depth of cover. <br /> The competitive and volatile nature of the present metallurgical coal market exercises <br /> signicant influence over the mining operation as well, and requires that the operator be <br /> 12 <br />