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EXHIBIT 10.21
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XX 0000-0 Serial Number
(April 1985) UNITED STATES
DEPARTMENT OF THE INTERIOR WYW3446
BUREAU OF LAND MANAGEMENT
Date Lease Issued
COAL LEASE READJUSTMENT
NOVEMBER 1, 1967
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PART I: 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)
THUNDER BASIN COAL COMPANY
X.X. XXX 000
XXXXXX, XXXXXXX 00000
hereinafter called the lessee, is readjusted, effective NOVEMBER 1, 1997, 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:
XX[ ] Mineral Lands Leasing Act of 1920, Act of February 25, 1920, as
amended, 00 Xxxx. 000, 00 X.X.X. 181-287, hereinafter referred to as the Act;
[ ] Mineral Leasing Act for Acquired Lands, Act of August 7, 1947, 61
Stat. 913, 30 U.S.C. 351-359;
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, Wyomng:
T. 45 N., R. 70 W., 6th P.M., Wyoming T. 46 N., R. 70 W., 6th P.M., Wyoming
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Sec. 4: Lots 7-10; Sec. 17: Lots 1-16;
Sec. 5: Lots 5, 6, 11, 12; Sec. 18: Xxxx 0, 0, 00-00, 00, 00,
XXXX;
Sec. 19: Lots 5, 6, 11-14, 19, 20;
Sec. 20: Lots 1-16;
Sec. 21: Lots 1-16;
Sec. 22: Lots 3-6, 11-14;
Sec. 27: Lots 3-6, 11-14;
Sec. 28: Lots 1-13;
Sec. 29: Lots 1-12;
Sec. 32: Lots 1-4, 9, 10, 15,16;
Sec. 33: Lots 1-16;
Sec. 34: Lots 3-6, 11-14.
containing 5917.990 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 lease 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 per cent of the
value of the coal produced by strip or auger methods and 8 per cent 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 in which the royalty obligation
accrues.
(b) ADVANCE ROYALTIES - Upon request by lessee, 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. Sec. 3. BONDS - Lessee shall maintain in the proper
office a lease bond in the amount of $344,000. 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.
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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.
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 authorized 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. Neither lessee nor lessee's subcontractors shall maintain
segregated facilities.
Sec. 9. (a) TRANSFERS
XX[ ] 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
time 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 onsite damage caused by lessee'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.
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SEC. 15. SPECIAL STIPULATIONS, Continued Page 1 of 2
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 the 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 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 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
construction, the find will be reported to the Authorized Officer immediately.
Construction 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 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.
(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 - Notwithstanding the approval of a
resource recovery and protection plan (R2P2) by the BLM, lessor reserves the
right to seek damages against the operator/lessee in the event (i) the
operator/lessee fails to achieve maximum economic recovery (MER) (as defined at
43 CFR 3480.0-5(21)) of the recoverable coal reserves or (ii) the
operator/lessee is determined to have caused a wasting of recoverable coal
reserves. Damages shall be measured on the basis of the royalty that would have
been payable on the wasted or unrecovered coal.
The parties recognize that under an approved R2P2, conditions may require a
modification by the operator/lessee of that plan. In the event a coalbed or
portion thereof is not to be mined or is rendered unmineable by the operation,
the operator/lessee shall submit appropriate justification to obtain approval by
the authorized officer (AO) to leave such reserves unmined. Upon approval by the
AO, such coalbeds or portions thereof shall not be subject to damages as
described above. Further, nothing in this section shall prevent the
operator/lessee from exercising its right to relinquish all or portion of the
lease as authorized by statute and regulation.
In the event the AO determines that the R2P2, as approved, will not attain MER
as the result of changed conditions, the AO will give proper notice to the
operator/lessee as required under applicable regulations. The AO will order a
modification if necessary, identifying additional reserves to be mined in order
to attain MER. Upon a final administrative or judicial ruling upholding such an
ordered modification, any reserves left unmined (wasted) under that plan will be
subject to damages as described in the first paragraph under this section.
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SEC. 15. SPECIAL STIPULATIONS, Continued - Page 2 of 2
Subject to the right to appeal hereinafter set forth, payment of the value of
the royalty on such unmined recoverable coal reserves shall become due and
payable upon determination by the AO that the coal reserves have been rendered
unmineable or at such time that the operator/lessee has demonstrated an
unwillingness to extract the coal.
The BLM may enforce this provision either by issuing a written decision
requiring payment of the MMS demand for such royalties, or by issuing a notice
of non-compliance. A decision or notice of non-compliance issued by the lessor
that payment is due under this stipulation is appealable as allowed by law.
(f) 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.
