PERMFILE60447

• Permit No: M1982075
• IBM Index Class Name: Permit File
• Doc Date: 1/27/1987
• From: MLRD
• To: COLO STATE CAPITAL
• Media Type: D
• Archive: No

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Richartl D. Lamm
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DEPARTMENT OF NATURAL RESOURCES
Davitl H. Getch es, Exf~culive Dire clot
MINED LAND RECLAMATION DI\
DAVID C- SHELTQ N, Director
January 27, 1987
Colorado State Capitol
Denver, Colorado 80203
Dear
I recently discovered, after inquiries from several legislators, that
Mr. Alvin Mosch of Idaho Springs sent a letter to each of you concerning
difficulties he has had with our reclamation bonding program. Several issues
are raised which deserve an explanation.
The requirement of maintaining adequate financial warranty for mine
reclamation is a cornerstone of the Mined Land Reclamation Act of 1976. In
the law (C.R.S. 34-32-•101, et seq., specifically Section 117) we must require
the operator to maintain sufficient financial warranties to allow the state to
complete reclamation in the event that the pennittee is unable to do so. The
financial warranty must be in place throughout the life of the operation and
:ad,justed as necessary i'or changes in reclamation costs.
It was such an adjustment that the inspector believed was necessary as a
result of an inspection of h1r. Mosch's mine conducted while on the way to
another mine. That observation was noted and a response was requested in two
separate inspection reports sent to Mr. Mosch. Upon receiving no response
from him the matter was scheduled before the i4ined Land Reclamation Board
(Board). Under the statute, all decisions must be made by the Board with the
Division acting as stelff to the Board. Normally, differences of opinion of
this nature are discussed and settled before going to the Board. In this
case, however, the lack of response from Mr. Mosch necessitated the Board
involvement to reconcile the differences and make the decision. Refore the
Board, h1r. Mosch argued the financial warranty should be zero, and the
Division, based on field observations and the reclamation plan in the permit,
believed it should be 5800.00. 'The state was holding a financial warranty of
$100.00. The Board, after hearing all of the testimony, increased it from
$100.00 to $200.00 based on a clarification of conditions at the site and an
understanding of Mr. t4osch's financial plight. Certainly, the process and
final outcome were very favorable for Mr, Mosch, and his financial warranty
set at $200.00 remains one of the lowest in the state for any permitted
operation (only 14 of 1.480 financial warranties are $200.00 or less).
A second issue to which h1r. Mosch refers involves a cyanide heap leach
operator who, as a result of a bank failure, lost an irrevocable letter of
credit. The t4ined Land Reclamation Division and Board allowed the operator
five months to replace the financial warranty before taking any punitive
action. The Board believed this leniency was appropriate given the fact that
the loss of the financial warranty was beyond the permittee's control. Even
423 Centennial Building, 1313 Sherman Street Denver, Colorado 80203 Tel. [phone]