EXHIBIT 10.3
United States Department of the Interior
In Reply Refer To:
BUREAU OF LAND MANAGEMENT
Wyoming State Office 3452
P.O. Box 1828 WYW0321779
Cheyenne, Wyoming 82003-1828 (921MLove)
PHONE NO: 000-000-0000
FAX NO: 000-000-0000
D E C I S I O N
Powder River Coal Company :
Attn: Xxxxxx X. Xxxxxx : Federal Coal Lease
Caller Box 3034 : North Antelope/Xxxxxxxx Mine
Gillette, Wyoming 82717-3034 :
Partial Relinquishment Accepted
-------------------------------
On February 17, 1998, we received a partial relinquishment of Federal coal lease
WYW0321779 as to the following lands:
T. 41 N., R. 70 W., 6th P.M., Wyoming
Sec. 3: Lots 17 (S2), 18, 19, 20 (W2);
Sec. 10: Lots 1-10;
Sec. 11: Lots 2 (W2), 3-6, 7 (W2), 12.
Containing 758.875 acres, more or less.
The Casper District Office has determined that the public interest shall not be
impaired by acceptance of the relinquishment, as maximum economic recovery of
the recoverable resource shall be achieved and adequate reclamation has occurred
in accordance with the policy outlined in Instruction Memorandum No. WY-98-35.
That office has recommended that the partial relinquishment be accepted.
Therefore, the partial relinquishment of Federal coal lease WYW0321779 is hereby
accepted effective February 17, 1998, the date the relinquishment was filed.
Acceptance of this partial relinquishment does not relieve Powder River Coal
Company, or its successors, from complying with the reclamation requirements of
30 CFR Chapter VII, Subchapter K, or an approved State program. (43 CFR 3480.0-
6(d)(8))
The following-described lands are remaining in Federal coal lease WYW0321779:
T. 41 N., R. 69 W., 6th P.M., Wyoming
Sec. 6: Lots 8-23;
Sec. 7: Lots 5-12, 14-19;
Sec. 18: Lots 6, 7, 10, 11;
T. 42 N., R. 69 W., 6th P.M., Wyoming
Sec. 19: Lots 8, 13, 14;
Sec. 30: Lots 8-20;
Sec. 31: Lots 5-20;
T. 41 N., R. 70 W., 6th P.M., Wyoming
Sec. 1: Lots 5-7, 10-15, 17-20;
Sec. 2: Lots 17-20;
Sec. 3: Lots 17 (N2), 20 (E2);
Sec. 11: Lots 1, 2 (E2), 7 (E2), 8, 9;
Sec. 12: Lots 1-14, 16;
T. 42 N., R. 70 W., 6th P.M., Wyoming
Sec. 13: Lots 13-16
Sec. 14: Lots 9-16;
Sec. 15: Lots 9-16;
Sec. 22: Lots 1, 2, 7, 8;
Sec. 23: Lots 1-16;
Sec. 24: Lots 1-16;
Sec. 25: Lots 1-16;
Sec. 26: Lots 1, 2, 7, 8.
Containing 7,286.745 acres, more or less.
Attached to this Decision is an acreage calculation worksheet, which lists the
acreage amounts for the lands remaining in the lease.
The new rental amount due each year for this lease beginning December 1, 1998,
will be $21,861.00.
If you have any questions concerning this matter, please contact Xxxxx Xxxx in
the Minerals and Lands Authorization Group at 000-000-0000.
Xxxx X. Xxxxxxx
State Director
Attachment
cc:
Department of Environmental Quality, Land Quality Division,
000 Xxxx 00xx Xxxxxx, Xxxxxxxx, XX 00000
Department of Environmental Quality, Land Quality Division,
Attn: Xxx Xxxxxxxxxx, 0000 Xxxxxxx Xxxxxx, Xxxxx X,
Xxxxxxxx, WY 82801
Office of Surface Mining, Attn: Xx. Xxxxx Xxxxxxxx, Western
Regional Coordinating Center, 0000 Xxxxxxxx, Xxxxx 0000,
Xxxxxx, XX 00000-5733
MMS, REP, Reporting & Valuation Division, Solid Minerals
Reporting Staff, P.O. Box 5760, MS3153, Denver CO 80217
WO (320), Room 501, LS
DM, Casper
ACREAGE CALCULATIONS FOR LANDS REMAINING IN
FEDERAL COAL LEASE WYW0321779
AFTER ACCEPTANCE OF PARTIAL RELINQUISHMENT
EFFECTIVE FEBRUARY 17, 1998
T. 41 N., R. 69 W., 6th P.M., Wyoming
-------------------------------------
Sec. 6: Lots 8-23 649.410
Sec. 7: Lots 5-12, 14-19 559.850
Sec. 18: Lots 6, 7, 10, 11 160.770
T. 42 N., R. 69 W., 6th P.M. Wyoming
------------------------------------
Sec. 19: Lots 8, 13, 14 120.540
Sec. 30: Lots 8-20 529.050
Sec. 31: Lots 5-20 657.650
T. 41 N., R. 70 W., 6th P.M. Wyoming
---------------------------------------
Sec. 1: Lots 5-7, 10-15, 17-20 525.800
Sec. 2: Lots 17-20 157.520
Sec. 3: Lot 17 (N2) 19.425
Lot 20 (E2) 19.150
Sec. 11: Lot 1 40.590
Lot 2 (E2) 20.285
Lot 7 (E2) 20.215
Lot 8 40.450
Lot 9 40.350
Sec. 12: Lots 1-14, 16 608.870
T. 42 N., R. 70 W., 6th P.M. Wyoming
------------------------------------
Sec. 13: Lots 13-16; 162.990
Sec. 14: Lots 9-16 326.480
Sec. 15: Lots 9-16 332.010
Sec. 22: Lots 1, 2, 7, 8 164.540
Sec. 23: Lots 1-16 653.520
Sec. 24: Lots 1-16 651.400
Sec. 25: Lots 1-16 660.410
Sec. 26: Lots 1, 2, 7, 8 165.470
TOTAL ACREAGE 7,286.745
Serial Number
UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT WYW0321779
Date Lease Issued
COAL LEASE READJUSTMENT
12-01-66
--------------------------------------------------------------------------------
PART 1: LEASE RIGHTS GRANTED
This lease, entered into by and between the United States of America,
hereinafter called the lessor, through the Bureau of Land Management, and (Name
and Address)
Powder River Coal Company
Xxxxxx Xxx 0000
Xxxxxxxx, XX 00000-3034
hereinafter called the lessee, is readjusted, effective 12-01-96, for a period
of 10 years and for so long thereafter as coal is produced in commercial
quantities from the leased lands, subject to readjustment of lease terms at the
end of each 10-year period.
Sec. 1. This lease readjustment is subject to the terms and provisions of the:
XXX Mineral Lands Leasing Act of 1920, Act of February 25, 1920, as amended, 41
Stat. 437, 30 U.S.C. 181-287, hereinafter referred to as the Act; as to 8005.12
A
XXX Mineral Leasing Act for Acquired Lands, Act of August 7, 1947, 61 Stat. 913,
30 U.S.C. 351-359; as to 40.05 A and to the regulations and formal orders of the
Secretary of the Interior which are now or hereafter in force, when not
inconsistent with the express and specific provisions herein.
Sec. 2. Lessor, in consideration of any rents and royalties to be paid, and the
conditions and covenants to be observed as herein set forth, hereby grants to
lessee the exclusive right and privilege to drill for, mine, extract, remove or
otherwise process and dispose of the coal deposits in, upon, or under the
following described lands in Xxxxxxxx County, Wyoming:
T. 41 N., R. 69 W., 6th P.M., Wyoming
Sec. 6: Lots 8-23;
Sec. 7: Lots 5-12, 14-19;
Sec. 18: Lots 6, 7, 10, 11;
T. 42 N., R. 69 W., 6th P.M., Wyoming
Sec. 19: Lots 8, 13, 14;
Sec. 30: Lots 8-20;
Sec. 31: Lots 5-20;
WYW0321779
12-01-96 Readjustment
Page 2 of 4
T. 41 N., R. 70 W., 6th P.M., Wyoming
Sec. 1: Lots 5-7, 10-15, 17-20;
Sec. 2: Lots 17-20;
Sec. 3: Lots 17-20;
Sec. 11: Lots 1-9, 12
Sec. 12: Lots 1-13, 14 (ALQ Min); 16
T. 42 N., R. 70 W., 6th P.M., Wyoming
Sec. 13: Lots 13-16
Sec. 14: Lots 9-16;
Sec. 15: Lots 9-16;
Sec. 22: Lots 1, 2, 7, 8;
Sec. 23: Lots 1-16;
Sec. 24: Lots 1-16;
Sec. 25: Lots 1-16;
Sec. 26: Lots 1, 2, 7, 8.
Containing 8045.620 acres, more or less, together with the right to
construct such works, buildings, plants, structures, equipment and appliances
and the right to use such on-lease rights-of-way which may be necessary and
convenient to the exercise of the rights and privileges granted, subject to the
conditions herein provided.
PART II. TERMS AND CONDITIONS
Sec. 1. (a) RENTAL RATE - Lessee shall pay lessor rental annually and in
advance for each acre or fraction thereof during the continuance of the use at
the rate of $3.00 for each lease year.
(b) RENTAL CREDITS - Rental shall not be credited against either production or
advance royalties for any year.
Sec. 2. (a) PRODUCTION ROYALTIES - The royalty shall be 12 1/2 percent of the
value of the coal produced by strip or auger methods and 8 percent of the value
of the coal produced by underground mining methods. The value of the coal shall
be determined as set forth in 43 CFR 3480. Royalties are due to lessor the
final day of the month succeeding the calendar month on which the royalty
obligation accrues.
(b) ADVANCE ROYALTIES - Upon request by xxxxxx, the Authorized Officer may
accept, for a total of not more than 10 years, the payment of advance royalties
in lieu of continued operation, consistent with the regulations. The advance
royalty shall be based on a percent of the value of a minimum number of tons
determined in the manner established by the advance royalty regulations in
effect at the time the lessee requests approval to pay advance royalties in lieu
of continued operation.
WYW0321779
12-01-96 Readjustment
Page 3 of 4
Sec. 3. BONDS - Lessee shall maintain in the proper office a lease bond in the
amount of $1,192,000.00. The Authorized Officer may require an increase in this
amount when additional coverage is determined appropriate.
Sec. 4. DILIGENCE - This lease is subject to the conditions of diligent
development and continued operation, except that these conditions are excused
when operations under the lease are interrupted by strikes, the elements, or
casualties not attributable to the lessee. The lessor, in the public interest,
may suspend the condition of continued operation upon payment of advance
royalties in accordance with the regulations in existence at the time of the
suspension. Lessee's failure to produce coal in commercial quantities at the
end of the 10 years shall terminate the lease. If not submitted already, lessee
shall submit an operation and reclamation plan pursuant to Section 7 of the Act
no later than 3 years after the effective date of this lease readjustment.
The lessor reserves the power to assent to or under the suspension of the terms
and conditions of this lease in accordance with, inter alia, Section 39 of the
Mineral Leasing Act, 30 U.S.C. 209.
Sec. 5. LOGICAL MINING UNIT (LMU) - Either upon approval by the lessor of the
lessee's application or at the direction of the lessor, this lease shall become
an LMU or part of an LMU, subject to the provisions set forth in the
regulations.
The stipulation established in an LMU approval in effect at the time of LMU
approval will supersede the relevant inconsistent terms of this lease so long as
the lease remains committed to the LMU. If the LMU of which this lease is a
part is dissolved, the lease shall then be subject to the lease terms which
would have been applied if the lease had not been included in an LMU.
Sec. 6. DOCUMENTS, EVIDENCE AND INSPECTION - At such times and in such form as
lessor may prescribe, lessee shall furnish detailed statements showing the
amounts and quality of all products removed and sold from the lease, the
proceeds therefrom, and the amount used for production purposes or unavoidably
lost.
Lessee shall keep open at all reasonable times for the inspection of any duly
Authorized Officer of the lessor, the leased premises and all surface and
underground improvements, works, machinery, ore stockpits, equipment, and all
books, accounts, maps and records relative to operations, surveys, or
investigations on or under the leased lands.
Lessee shall allow lessor access to and copying of documents reasonably
necessary to verify lessee compliance with terms and conditions of the lease.
WYW0321779
12-01-96 Readjustment
Page 4 of 4
While this lease remains in effect, information obtained under this section
shall be closed to inspection by the public in accordance with the Freedom of
Information Act (5 U.S.C. 552).
Sec. 7. DAMAGES TO PROPERTY AND CONDUCT OF OPERATIONS - Lessee shall comply at
its own expense with all reasonable orders of the Secretary, respecting diligent
operations, prevention of waste, and protection of other resources.
Lessee shall not conduct exploration operations, other than casual use, without
an approved exploration plan. All exploration plans prior to the commencement
of mining operations within an approved mining permit area shall be submitted to
the Authorized Officer.
Lessee shall carry on all operations in accordance with approved methods and
practices as provided in the operating regulations, having due regard for the
prevention of injury to life, health, or property, and prevention of waste,
damage, or degradation to any land, air, water, cultural, biological, visual,
and other resources, including mineral deposits and formations of mineral
deposit not leased hereunder, and to other land uses or users. Lessee shall
take measures deemed necessary by lessor to accomplish the intent of this lease
term. Such measures may include, but are not limited to modification to
proposed siting or design of facilities, timing of operations, to itself the
right to lease, sell or otherwise dispose of the surface or other mineral
deposits in the lands and the right to continue existing uses and to authorize
future uses upon or in the leased lands, including issuing leases for minerals
deposits not covered hereunder, and approving easements or rights-of-way.
Lessor shall condition such uses to prevent unnecessary or unreasonable
interference with rights of lessee as may be consistent with concepts of
multiple use and multiple mineral development.
Sec. 8. PROTECTION OF DIVERSE INTEREST, AND EQUAL OPPORTUNITY -Lessee shall:
pay when due all taxes legally assessed and levied under the laws of the State
or the United States; accord all employees complete freedom of purchase; pay all
wages at least twice each month in lawful money of the United States; maintain a
safe working environment in accordance with standard industry practices;
restrict the workday to not more than 8 hours in any one day for underground
workers except in emergencies; and take measure necessary to protect the health
and safety of the public. No person under the age of 16 years shall be employed
in any mine below the surface. To the extent that laws of the State in which
the lands are situated are more restrictive than the provisions in the
paragraph, then the State laws apply.
Lessee will comply with all provisions of Executive Order No. 11246 of September
24, 1965, as amended, and the rules, regulations, and relevant orders of the
Secretary of Labor.
WYW0321779
12-01-96 Readjustment
Page 5 of 4
Neither lessee nor lessee's subcontractors shall maintain segregated facilities.
Sec. 9. (a) TRANSFERS
XXX This lease may be transferred in whole or in part to any person,
association or corporation qualified to hold such lease interest.
[ ] This lease may be transferred in whole or in part to another public body,
or to a person who will mine the coal on behalf of, and for the use of, the
public body or to a person who for the limited purpose of creating a
security interest in favor of a lender agrees to be obligated to mine the
coal on behalf of the public body.
[ ] This lease may only be transferred in whole or in part to another small
business qualified under 13 CFR 121.
Transfers of record title, working or royalty interest must be approved in
accordance with the regulations.
(b) RELINQUISHMENT - The lessee may relinquish in writing at any time all
rights under this lease or any portion thereof as provided in the regulations.
Upon lessor's acceptance of the relinquishment, lessee shall be relieved of all
future obligations under the lease or the relinquished portion thereof,
whichever is applicable.
Sec. 10 DELIVERY OF PREMISES, REMOVAL OF MACHINERY, EQUIPMENT, ETC. - At such
times as all portions of this lease are returned to lessor, lessee shall deliver
up to lessor the land leased, underground timbering, and such other supports and
structures necessary for the preservation of the mine workings on the leased
premises or deposits and place all workings in condition for suspension or
abandonment. Within 180 days thereof, lessee shall remove from the premises all
other structures, machinery, equipment, tools, and materials that it elects to
or as required by the Authorized Officer. Any such structures, machinery,
equipment, tools and materials remaining on the leased lands beyond 180 days or
approved extension thereof, shall become the property of the lessor, but lessee
shall either remove any or all such property or shall continue to be liable for
the cost of removal and disposal in the amount actually incurred by the lessor.
If the surface is owned by third parties, lessor shall waive the requirement for
removal, provided the third parties do not object to such waiver. Lessee shall,
prior to the termination of bond liability or at any other time when required
and in accordance with all applicable laws and regulations reclaim all lands the
surface of which has been disturbed, dispose of all debris or solid waste,
repair the offsite and
WYW0321779
12-01-96 Readjustment
Page 6 of 4
onsite damage caused by xxxxxx's activity or activities incidental thereto, and
reclaim access roads or trails.
Sec. 11. PROCEEDINGS IN CASE OF DEFAULT - If lessee fails to comply with
applicable laws, existing regulations, or the terms, conditions and stipulations
of this lease, and the noncompliance continues for 30 days after written notice
thereof, this lease shall be subject to cancellation by the lessor only by
judicial proceedings. This provision shall not be construed to prevent the
exercise by lessor of any other legal and equitable remedy, including waiver of
the default. Any such remedy or waiver shall not prevent later cancellation for
the same default occurring at any other time.
Sec. 12. HEIRS AND SUCCESSORS-IN-INTEREST - Each obligation of this lease shall
extend to and be binding upon, and every benefit hereof shall inure to, the
heirs, executors, administrators, successors, or assigns of the respective
parties hereto.
Sec. 13. INDEMNIFICATION - Lessee shall indemnify and hold harmless the United
States from any and all claims arising out of the lessee's activities and
operations under this lease.
Sec. 14. SPECIAL STATUTES - This lease is subject to the Federal Water
Pollution Control Act (33 U.S.C. 1151-1175), the Clean Air Act (42 U.S.C. 1857,
et. seq.), and to all other applicable laws pertaining to exploration
activities, mining operations and reclamation, including the Surface Mining
Control and Reclamation Act of 1977 (30 U.S.C. 1201 et. seq.).
Sec. 15. SPECIAL STIPULATIONS - In addition to observing the general
obligations and standards of performance set out in the current regulations, the
lessee shall comply with and be bound by the following special stipulations.
These stipulations are also imposed upon the lessee's agents and employees. The
failure or refusal of any of these persons to comply with these stipulations
shall be deemed a failure of the lessee to comply with the terms of this lease.
The lessee shall require his agents, contractors and subcontractors involved in
activities concerning this lease to include these stipulations in the contracts
between and among them. These stipulations may be revised or amended, in
writing, by the mutual consent of the lessor and the lessee at any time to
adjust to changed conditions or to correct an oversight.
(a) CULTURAL RESOURCES
(1) Before undertaking any activities that may disturb the surface of the
leased lands, the lessee shall conduct a cultural resource intensive field
inventory in a manner specified by the Authorized Officer of the BLM or of the
surface managing agency, if different, on portions of the mine plan area and
adjacent areas, or exploration plan area, that may be adversely affected
WYW0321779
12-01-96 Readjustment
Page 7 of 4
by lease-related activities and which were not previously inventoried at such a
level of intensity. The inventory shall be conducted by a qualified
professional cultural resource specialist (i.e., archeologist, historian,
historical architect, as appropriate), approved by the Authorized Officer of the
surface managing agency (BLM if the surface is privately owned), and a report of
the inventory and recommendations for protecting any cultural resources
identified shall be submitted to the Assistant Director of the Western Support
Center of the Office of Surface Mining, the Authorized Officer of the BLM, if
activities are associated with coal exploration outside an approved mining
permit area (hereinafter called Authorized Officer), and the Authorized Officer
of the surface managing agency, if different. The lessee shall undertake
measures, in accordance with instructions from the Assistant Director, or
Authorized Officer, to protect cultural resources on the leased lands. The
lessee shall not commence the surface disturbing activities until permission to
proceed is given by the Assistant Director or Authorized Officer.
(2) The lessee shall protect all cultural resource properties within the lease
area from lease-related activities until the cultural resource mitigation
measures can be implemented as part of an approved mining and reclamation plan
or exploration plan.
(3) The cost of conducting the inventory, preparing reports, and carrying out
mitigation measures shall be borne by the lessee.
(4) If cultural resources are discovered during operations under this lease,
the lessee shall immediately bring them to the attention of the Assistant
Director or Authorized Officer, or the Authorized Officer of the surface
managing agency, if the Assistant Director is not available. The lessee shall
not disturb such resources except as may be subsequently authorized by the
Assistant Director or Authorized Officer. Within two (2) working days of
notification, the Assistant Director or Authorized Officer will evaluate or have
evaluated any cultural resources discovered and will determine if any action may
be required to protect or preserve such discoveries. The cost of data recovery
for cultural resources discovered during lease operations shall be borne by the
surface managing agency unless otherwise specified by the Authorized Officer of
the BLM or of the surface managing agency, if different.
(5) All cultural resources shall remain under the jurisdiction of the United
States until ownership is determined under applicable law.
(b) PALEONTOLOGICAL RESOURCES - If paleontological resources, either large and
conspicuous, and/or of significant scientific value are discovered during mining
operations, the find will be reported to the Authorized Officer immediately.
Mining
WYW0321779
12-01-96 Readjustment
Page 8 of 4
operations will be suspended within 250 feet of said find. An evaluation of the
paleontological discovery will be made by a BLM approved professional
paleontologist within five (5) working days, weather permitting, to determine
the appropriate action(s) to prevent the potential loss of any significant
paleontological value. Operations within 250 feet of such discovery will not be
resumed until written authorization to proceed is issued by the Authorized
Officer. The lessee will bear the cost of any required paleontological
appraisals, surface collection of fossils, or salvage of any large conspicuous
fossils of significant scientific interest discovered during the mining
operations.
(c) MULTIPLE MINERAL DEVELOPMENT - Operations will not be approved which, in
the opinion of the Authorized Officer, would unreasonably interfere with the
orderly development and/or production from a valid existing mineral lease issued
prior to this one for the same lands. Lessor reserves the right in accordance
with applicable coal regulations administered by Lessor to require the
Operator/Lessee to modify the Resource Recovery and Protection Plan (R2P2) to
minimize conflicts with other resources and to maximize recovery of all
resources.
(d) OIL AND GAS/COAL RESOURCES - The BLM realizes that coal mining operations
conducted on Federal coal leases issued within producing oil and gas fields may
interfere with the economic recovery of oil and gas; just as Federal oil and gas
leases issued in a Federal coal lease area may inhibit coal recovery. BLM
retains the authority to alter and/or modify the Resource Recovery and
Protection Plans for coal operations and/or oil and gas operations on those
lands covered by Federal mineral leases so as to obtain maximum resource
recovery.
(e) RESOURCE RECOVERY AND PROTECTION - Any bypass of Federal coal previously
determined to be economically recoverable under an approved Resource Recovery
and Protection Plan (R2P2), must have the written approval of the Authorized
Officer of the BLM in the form of an approved modification to the R2P2 prior to
the Federal coal being bypassed. (43 CFR 3482.2(e)(2)) Failure to comply with
this requirement shall result in the issuance of a Notice of Noncompliance by
the Authorized Officer. The Notice of Noncompliance will include the amount of
damages to be assessed for the unauthorized bypass of Federal coal as determined
by the Authorized Officer. Lessee shall pay royalty for all coal not recovered
which was available for mining and was economically recoverable by mining
operations under an R2P2 approved by the Authorized Officer. The royalty shall
be determined in accordance with Section 2.(a), PRODUCTION ROYALTIES, of this
lease, and the value of the coal shall be determined as set forth in the
applicable coal regulations administered by the Lessor. Federal coal not
recovered, but which was available for recovery,
WYW0321779
12-01-96 Readjustment
Page 9 of 4
will be volumetrically determined by the Authorized Officer using standard
industry practices.
(f) RECORDS OF PRODUCTION AND SALES - Lessee will accurately determine the
weight of all leased coal deposits mined (produced) and sold, will keep accurate
records of such, and make those available to the Authorized Officer for
inspection.
(g) PUBLIC LAND SURVEY PROTECTION - The lessee will protect all survey
monuments, witness corners, reference monuments, and bearing trees against
destruction, obliteration, or damage during operations on the lease areas. If
any monuments, corners or accessories are destroyed, obliterated, or damaged by
this operation, the lessee will hire an appropriate county surveyor or
registered land surveyor to reestablish or restore the monuments, corners, or
accessories at the same location, using surveying procedures in accordance with
the "Manual of Surveying Instructions for the Survey of the Public Lands of the
--------------------------------------------------------------------------
United States." The survey will be recorded in the appropriate county records,
-------------
with a copy sent to the Authorized Officer.
