2012-10-12_REVISION - C1980007 (2)

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Ms. Loretta Pineda, Director Division of Reclamation, Mining and Safety Department of Natural Resources 1313 Sherman St., Room 215 Denver, CO 80203 Dear Ms. Pineda: United States Department of the Interior OFFICE OF SURFACE MINING Reclamation and Enforcement Western Region Office 1999 Broadway, Suite 3320 Denver, CO 80202 -3050 October 10, 2012 RECE OC1 122012 pivision of R& Sa aton, Mining RE: Proposed Decision to Approve Phase I Bond Release, West Elk Mine, Permit No. C- 1980 -007, Bond Release Application No. 3 This letter acknowledges the Office of Surface Mining's (OSM) receipt and review of the subjects August 10, 2012, Proposed Decision for partial bond release on the above permit area which includes Federal lands. OSM is in agreement with the Proposed Decision and Findings of Compliance document (Proposed Decision) and hereby provides OSM concurrence to release Phase I Bond in accordance with 30 CFR 906.30.24. The Colorado Department of Natural Resources, Division of Reclamation, Mining and Safety (DRMS) conducted the Phase I Bond Release inspection required at Colorado Rule 3.03.2(2) on July 19 and 20, 2011, with follow -up inspections on June 19 and 20, 2012, and August 7, 2012. DRMS's Proposed Decision documents the inspection findings and indicates that all required public notices and surface landowner notifications were made in a timely manner prior to the inspection. The ownership of the land for which bond release has been requested is under private or federal ownership. The coal ownership is also private or federal ownership. The OSM Denver Field Division (DFD) participated in the June 2012 bond release inspections and the inspection findings are documented in the OSM Mine -Site Evaluation Inspection Report dated June 19, 2012. The US Forest Service (USFS) was also notified of the inspections and attended on July 19 and 20, 2011, June 19 and 20, 2012, and August 7, 2012. The US Bureau of Land Management (BLM) was notified of the inspections and attended the August 7, 2012 inspection. Both the BLM and USFS received and reviewed DRMS's August 10, 2012, Proposed Decision. DFD received BLM's concurrence letter on October 9, 2012 and received USFS's concurrence letter on September 5, 2012 (attached). No other Federal Land Management Agencies are involved in this action. No written objections or requests for an informal conference regarding the bond release application have been received by DRMS. The DFD understands the release application applies to 47.65 acres of reclaimed surface areas consisting of 74 drill holes, 48 drill pads and 8.5 miles of road. DRMS holds a performance bond of $15,000,000.00 for Mountain Coal Company's West Elk Mine. DRMS proposes a liability only release from $14,606,118.30 to $14,135,630.30; a reduction of $470.488.00.