GENERAL35186

• Permit No: C1981015
• IBM Index Class Name: General Documents
• Doc Date: 8/13/1990
• Doc Name: FRUITA MINE RECLAMATION DUE DILIGENCE BLM COAL LEASES
• From: MLRD
• To: FRUITA FILE C-8-015
• Permit Index Doc Type: GENERAL CORRESPONDENCE
• Media Type: D
• Archive: No

~~STATE OF COLORADO
MINED LAND RECLAMATION DIVISION
Department of Natural Resources
1313 Sherman St., Room 215
Denver, CO 80203
303 666-3567
FAX: [phone]
MEMO
Date: August 13, 1990
To: Fruita File (C-81-015)
From: Randy Price
RE: Fruita Mine Reclamation, Due Diligence BLM Coal Leases
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Roy Romer,
Governor
Fretl R Banra.
Division Drtector
Today I spoke with The BLM Grand Junction office concerning Alfred Hoyl's
coal leases at the Fruita Mine. Because federal coal was never mined on
these leases, the due diligence clause will allow the 10 year leases to
expire without the possibility of renewal. These leases will expire
December, 1990.
Mr. Hoyl has requested that the BLM extend the due diligence period to
allow him to find a company to mine the coal. I spoke to Ed Ginovus (sp?)
of the Grand Junction office of the BLM and he said that it would require
several million tons of coal to be mined before December 1991 to meet the
requirements of due diligence and that it was improbable that a extension
would be granted. The only way that an extension could be granted is for
Mr. Hoyl to prove "force majeure", that the mine could not operate because
of circumstances beyond the mines control, and that diligent efforts were
made to reopen the mine. He said that the due diligence clause is to
prevent speculators from teasing coal tracts, holding on to them until the
market turns around and then selling them for a profit. It appears that
Mr. Hoyl is doing just that.
The BLM in Grand Junction has issued a recommendation to the Denver office
that the request for an extension be denied. As of today he said that he
has not received a formal notice from the Denver office.
ADDENDUM
August 20, 1990
I spoke with Mat Macomb of the BLM Denver Office today. He is with the
permits and leasing department. I gathered the following information
during our conversation. BLM will deny AI Hoyl's request for an extension
of due diligence on his coal leases. He does have the right to appeal
which may take another couple of years. Currently Mr. Hoyle is leasing
17,000 acres. In 1992 these leases will be open for closed bids. Minimum
bid allowed would be $100.00 per acre ($1,700,00.00) but since the
reserves are known in this area, BLM will probably ask $400.00 per acre
($6,800,000.00). Mr. Hoyl has not paid his annual fee for these leases for
the past 2 years. The annual fee is $3.00 per acre (2X years =
$102,000.00).