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Federal coal resources. (See Mineral Leasing Act (MLA) of 1920, as amended by the Federal Coal Leasing Amendments Act (FCLAA) of 1976; Federal Land Policy and Management Act (FLPMA) of 1976; 43 C.F.R § 3400, et seq.). The decision to lease these lands is a necessary prerequisite for mining, but it does not authorize mining. If the BLM decides to lease the Federal coal described in the LBA submitted by BME, there will be a competitive sealed -bid lease sale for the tract. The successful lessee must then submit a plan, or modification to an existing plan, for mining and reclamation to the Department of the Interior, Office of Surface Mining Reclamation and Enforcement (OSM), for review and approval. Once a mining plan has been submitted, OSM will review the developments proposed in the mining plan. BME is the holder of seven federal coal leases and operates the underground longwall Deserado Mine that supplies coal to the Bonanza Power Plant near Bonanza, Utah. The mine is located in Rio Blanco County, Colorado approximately seven miles northeast of Rangely, Colorado. The Deserado Mine was permitted in 1981 and has been producing coal since 1983. As of January 2012, the mine has shipped more than 44 million tons of clean coal (coal in which the impurities inherent within the coal seam and introduced during mining are removed) to the Bonanza Power Plant. In 1985 the leases were formed into the Deserado Mine Logical Mining Unit (LMU). A high capacity longwall was installed in December 1986. The Deserado Mine is considered a captive mine since all coal produced is sold and shipped to its sole customer, the Bonanza Power Plant. The coal is transported 37 miles from the mine to the power plant via electric train. There are two mineable coal seams in the currently leased mine area, the D -Seam and the B -Seam. The upper seam is the D -Seam with an inter - burden that varies from 5 feet to 70 feet between the D and B- Seams. Recoverable D -Seam coal resources are only in the eastern and southeastern portion of the leased mine area and recoverable B -Seam coal resources are in the western and northern leased mine area. Production of coal from the D -Seam ceased in November 1999 and the longwall moved into the B -Seam. Mining of the B -Seam continues and is progressing towards the northwest. Depositional geology of the D and B -Seams are complex with multiple partings and varying mineable coal split thickness. Partings in the coal seam are horizontal lenses of sandstone, clay, or shale with varying coal content that vertically divide the seam. These partings are typically mined as part of the coal seam depending on the thickness and coal content of the partings. Mined coal is processed through a coal prep plant where any rock or low coal content material is removed resulting in a clean coal product. Subsidence (i.e. the land surface lowered as a result of mining) occurs above underground mining operations. The Deserado Mine's maximum predicted subsidence above the longwall panels in the B -Seam is seven feet. Subsidence monitoring above a previously mined longwall panel in the D -Seam showed subsidence to be less than predicted with a limit effect of subsidence 200 feet outside the longwall mine panel boundaries. Mining of longwall panels has already occurred beneath approximately three miles of Rio Blanco County Road 65 and portions of Rio Blanco County Road 96. Subsidence from longwall mining has not interfered with the use of the roads. The Deserado Mine currently employs approximately 164 people and produces approximately 2.2 to 2.5 million raw tons per year and delivers on an average about 2 million clean tons annually to the Bonanza Power Plant. Blue Mountain Energy holds exploration licenses, COC72922 and COC74817, which overlie the LBA. Exploration drilling conducted in the fall of DOI- BLM -CO- 110 - 2012 - 0023 -EA 4