EXHIBIT 10.24
(STAMP) Serial Number
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WYW71692
Date of Lease
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December 1, 1966
UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
MODIFIED COAL LEASE
PART I.
THIS MODIFIED COAL LEASE is entered into on JAN 01, 2003, by and between the
UNITED STATES OF AMERICA, hereinafter called the Lessor, through the Bureau of
Land Management, and
Triton Coal Company, LLC
510 Reno Road
Gillette, Wyoming 82718
hereinafter called Lessee.
This modified lease shall retain the effective date of December 1, 1966, of the
original coal lease, and is effective for a period of 20 years therefrom, 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 the 20th
lease year, December 1, 1986, and each 10-year period thereafter. The next
readjustment date for the lease, as modified, will be December 1, 2006.
SEC. 1. This lease is issued pursuant and subject to the terms and provisions of
the:
[X] Mineral Lands Leasing Act of 1920, as amended, 41 Stat. 437, 30 U.S.C.
181-287, hereinafter referred to as the Act;
[ ] Mineral Leasing Act for Acquired Lands of 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. Lessee, as the holder of Coal Lease WYW71692, issued effective December
1, 1966, was granted 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 lands described below as being in Campbell County, Wyoming:
T.42 N., R. 70 W.,6th P.M.
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Sec. 2:Lots 17,18;
Sec. 3:Lots 17-20;
Sec. 9:Lots 9, 10, 15, 16;
Sec. 10:Lots 1-16;
Sec. 11:Lots 1-4, 8, 9;
Sec. 14:Lots 1-8;
Sec. 15:Lots 1-8.
The Lessor in consideration of fair market value, rents and royalties to be
paid, and the conditions and covenants to be observed as herein set forth,
hereby grants and leases 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 lands described below as being in Campbell
County, Wyoming:
T. 42 N., R. 70 W., 6th P.M.
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Sec. 11:Lot 10 (SW 1/4).
containing within the lease, as modified, 1,971.77 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 in the exercise of the rights and privileges granted,
subject to the conditions herein provided.
WYW71692
PART II. TERMS AND CONDITIONS Page 2 of 5 pages
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 percent of the
value of the coal produced by strip or augur methods and 8 percent of the value
of coal produced by underground mining methods as set forth in the regulations.
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 the 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 $3,883,000. 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. If not already submitted,the Lessee shall submit an amended
operation and reclamation plan pursuant to Section 7 of the Act (30 U.S.C.
207(c) within 3 years of the date of modification or prior to approval to
commence mining operations
The Lessor reserves the power to assent to or order 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 stipulations established in an LMU approval in effect at the time of LMU
approval or modification 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 office of Lessor, the leased premises and all surface and underground
improvements, works, machinery, ore stockpiles, 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 Action (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 deposits
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 not limited to, modification to proposed siting
or design of facilities, timing of operations, and specifications of interim and
final reclamation procedures. Lessor reserves 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 mineral 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 INTERESTS, 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
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Page 3 of 5 pages
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 measures
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 this 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
(Check the appropriate space)
X 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 on 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) RELINQUISHMENTS - 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. These
stipulations are also imposed upon the Lessee's agents and employees. The
failure or refusal of any of these persons to comply with the 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),
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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 surface disturbing activities, the find will be reported to the
Authorized Officer immediately. Surface disturbing activities 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 coal bed 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.
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
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royalties, or by issuing a notice of noncompliance. A decision or notice of
noncompliance 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.
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TRITON COAL COMPANY, LLC THE UNITED STATES OF AMERICA
By /s/ ILLEGIBLE By /s/ ROBERT A. BARNETT
--------------------------------- --------------------------------
(Signature of Lessee) (Signing Officer)
VICE PRESIDENT State Director
- ------------------------------------ ------------------------------------
(Title) (Title)
JAN. 20, 2003 JAN 30 2003
- ------------------------------------ -------------------------------------
(Date) (Date)
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Title 18 U.S.C. Section 1001, makes it a crime for any person knowingly and
willfully to make to any department or agency of the United States any false,
fictitious or fraudulent statements or representations as to any matter within
its jurisdiction.