1993-11-15_PERMIT FILE - C1981017

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characteristics of Coal Creek and its impact upon the Crystal River. Based upon the record, Colorado asserts that there is no evidence to suggest that the Division has not implemented the program as approved in regard to water quality at the Coal Basin Mine. Adequacy of Reclamation Bond Security The reclamation bond is secured by a first deed of trust on a limestone rock dust manufacturing facility. The Division accepted an appraisal of the facility in 1988. This appraisal established the value of the rock dust plant to be approximately $3, 000, 000. This value was sufficient to assure that the requirements of the reclamation plan could be accomplished. In 1991, as the Coal Basin Mine shut down, it became apparent that the actual value of the rock dust plant may be less than the appraised value. During this same period of time, the Division was pursuing a Show Cause action against Mid-Continent Resources. During these discussions, Resources revealed that they may become financially unable to operate the mine facility. Recognizing that the bond instrument may be insufficient, and that the permittee may become insolvent, the Division and Resources entered into an Agreement (Appendix 18) which allowed Resources time to sell the mine to another party who would be capable of posting a bond utilizing an adequate security. The Agreement included a reclamation schedule as well as mechanisms which triggered permit revocation and bond forfeiture should a sale or permit transfer not occur. The issue of sufficiency of the bond security was ultimately settled following the submittal of a citizens complaint with the State and the AFO (Appendix 14) . The complaint, dated November 15, 1991, alleged that the bond instrument was insufficient, and requested that OSM issue a Ten-Day Notice to the State which would require that additional bond be submitted to cover the unspecified inadequacy. Upon receipt of the Ten-Day Notice, Colorado declined to issue a Notice of Violation, stating that the May, 1991 Settlement Agreement provided a means of relief by recognizing that Resources was incapable of submitting additional bond, and as such that the best interests of the State would be served by enticing a financially viable entity to succeed to the permit. Further, the State argued that should a solvent permittee not be forthcoming, the State would take every available means to secure site reclamation (Appendix 15) . The AFO determined that this response was inappropriate on January 24, 1992. On February 3, 1992, the State appealed the AFO determination to Washington D.C. as provided in 30CFR 842. 11 (b) . On April 6, 1993, the Deputy Director of Operations and Technical -10-