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PERMIT RENEWAL APPLICATION

KAYENTA MINE PERMIT AZ-0001D

February 26, 2010

PEABODY WESTERN COAL COMPANY KAYENTA, ARIZONA

TABLE OF CONTENTS

Transmittal Letter, 774.15 Verification & Certification Statement, 777.11(c), 778.9(a)(b)(d) Certification Statement, 777.11(c), 778.9(a)(b)(d), 778.11(d) Table of Contents, 774.15 Introduction, 774.15(a), (b)(1) Name and Address of Permittee, Permit Number, and Permit Term, 774.15(b)(2)(i) Certificate of Liability Insurance, 774.15(b)(2)(ii) Current Certificate, 11/01/09 to 11/01/10 Performance Bond Assurance, 774.15(b)(2)(iii) Newspaper Notice and Proof of Publication, 774.15(b)(2)(iv) and 774.15(b)(3) Proposed Public Notice, 2010-2015 Permit Term Additional Updated Information, 774.15(b)(2)(v)

Introduction, 774.15(a), (b)(1)

Pursuant to 30 CFR 774.15(a) and (b)(1), Peabody Western Coal Company (PWCC) hereby submits an application for renewal of Surface Mine Permit AZ-0001D for Kayenta Mine. This

package has been submitted at least 120 days prior to the permit expiration date of July 6, 2010. The following information is included in this package to support the application The renewal does not propose any revisions to the The renewal application package contains:

and make it administratively complete. approved mining and reclamation plan.

1.

Name and address of the permittee, the term of the renewal requested, and permit number as required by 30 CFR 774.15(b)(2)(i)

2. 3. 4.

Certificate of liability insurance as required by 30 CFR 774.15(b)(2)(ii). Performance bond assurance as required by CFR 30 774.15(b)(2)(iii). Newspaper notice and proof of publication as required by 30 774.15(b)(2)(iv) and 30 774.15(b)(3).

5.

Additional updated information as required by 30 774.15(b)(2)(v).

Name and Address of Permittee, Permit Number, and Permit Term, 774.15(b)(2)(i).

Name and Address of Permittee:

Peabody Western Coal Company P. O. Box 650 Navajo Route 41 Kayenta, Arizona 86033 (928) 677-3201

This information is presented on Page 1, Chapter 3, Permit AZ-0001D.

Listed below is the

current permit number, permit number for the requested renewal permit, and the term of the requested renewal.

Permit Number:

AZ-0001D

2010-2015 Permit Number: AZ-0001D Renewal Term: July 6, 2010 through July 5, 2015

Certificate of Liability Insurance, 774.15(b)(2)(ii).

Attached is a Certificate of Liability Insurance for the Black Mesa Complex (which includes Kayenta Mine) indicating compliance with the minimum requirements for liability insurance per 30 CFR 800.60(a). The policy shall be maintained in full force during the

life of the permit, this and any subsequent renewals, and the liability period necessary to complete all reclamation operations per 30 CFR 800.60(b).

A copy of the effective Liability Insurance Certificate is always maintained in Attachment 5, Chapter 3, Volume 1 of the Kayenta Mine Permit AZ-0001D as specified on Page 4, Chapter 3 of the permit.

CERTIFICATE OF LIABILITY INSURANCE Page
PRODUCER

DATE (MM/DD/YYYY)

1 of 2

03/08/2010

877-945-7378
Willis of Tennessee, Inc. 26 Century Blvd. P. O. Box 305191 Nashville, TN 37230-5191

THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. INSURERS AFFORDING COVERAGE
INSURER A: INSURER B: INSURER C: INSURER D: INSURER E:

NAIC#
19445-011

INSURED

Peabody Energy Corporation and Subsidiaries Attn: Ryan Brown 701 Market Street Suite 700 St. Louis, MO 63101-1826

National Union Fire Insurance Company

COVERAGES
THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
INSR ADD’L LTR INSRD TYPE OF INSURANCE GENERAL LIABILITY POLICY NUMBER POLICY EFFECTIVE POLICY EXPIRATION DATE (MM/DD/YYYY) DATE (MM/DD/YYYY) LIMITS

A

GL4807243 X
OCCUR

11/1/2009

11/1/2010

X

COMMERCIAL GENERAL LIABILITY CLAIMS MADE

EACH OCCURRENCE DAMAGE TO RENTED PREMISES (Ea occurence) MED EXP (Any one person) PERSONAL & ADV INJURY GENERAL AGGREGATE

$ $ $ $ $ $

GEN’L AGGREGATE LIMIT APPLIES PER: PROPOLICY LOC JECT

PRODUCTS - COMP/OP AGG

2,000,000 100,000 5,000 2,000,000 2,000,000 2,000,000 2,000,000

A

AUTOMOBILE LIABILITY

CA4806729

11/1/2009

11/1/2010

X

ANY AUTO ALL OWNED AUTOS SCHEDULED AUTOS HIRED AUTOS NON-OWNED AUTOS

COMBINED SINGLE LIMIT (Ea accident) BODILY INJURY (Per person) BODILY INJURY (Per accident) PROPERTY DAMAGE (Per accident)

$

$

$

$ $ $ $ $ $ $

GARAGE LIABILITY

AUTO ONLY - EA ACCIDENT OTHER THAN AUTO ONLY: EACH OCCURRENCE AGGREGATE EA ACC AGG

ANY AUTO

EXCESS / UMBRELLA LIABILITY

OCCUR

CLAIMS MADE

DEDUCTIBLE RETENTION $ WORKERS COMPENSATION AND EMPLOYERS’ LIABILITY Y/N ANY PROPRIETOR/PARTNER/EXECUTIVE OFFICER/MEMBER EXCLUDED? (Mandatory in NH) If yes, describe under SPECIAL PROVISIONS below OTHER WC STATUTORY LIMITS E.L. EACH ACCIDENT OTHER

$ $

$

E.L. DISEASE - EA EMPLOYEE $ E.L. DISEASE - POLICY LIMIT $

DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES / EXCLUSIONS ADDED BY ENDORSEMENT / SPECIAL PROVISIONS

THIS VOIDS AND REPLACES PREVIOUSLY ISSUED CERTIFICATE DATED: 10/30/2009 WITH ID: 13317896 Covers all operations at the Black Mesa Complex which includes Kayenta and Black Mesa Mines for bodily injury and property damage, including damage from the use of explosives as a result of surface coal mining and reclamation operations.
CERTIFICATE HOLDER CANCELLATION
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION

Office of Surface Mining Reclamation and Enforcements Western Region Attn: Dennis Winterringer 1999 Broadway, Suite 3320 Denver, CO 80202-3050 ACORD 25 (2009/01)

30 DAYS WRITTEN XXXXXXXX XXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER, ITS AGENTS OR XXXXXXXXXXX REPRESENTATIVES.
DATE THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAIL NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO DO SO SHALL AUTHORIZED REPRESENTATIVE

Coll:2955254 Tpl:1004416 Cert:13896483

© 1988−2009 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD

Page 2 of 2

IMPORTANT

If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s).

DISCLAIMER
This Certificate of Insurance does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon.

ACORD 25 (2009/01)

Coll:2955254 Tpl:1004416 Cert:13896483

Performance Bond Assurance, 774.15(b)(2)(iii).

All performance bonds and Letter of Credit in effect for the Kayenta Mine operation will continue in full force and effect for the 2010 to 2015 five-year renewal period per 30 CFR 774.15(b)(2)(iii). PWCC recently calculated the bond liability for the 2005-2010 “worst PWCC will provide any The following

case” or highest reclamation liability year in October 2008. additional bond justified and required by OSMRE per 30

CFR 800.15.

documents are in force as of February 26, 2010 for the Black Mesa Complex (which includes Kayenta Mine). Permit AZ-0001D. Bond/LC No. 4144114 6197012 8940860 9264222 9264224 9264225 9264241 82154865 104536183 105191031 105243347 105253365 LC#1S1365004 Surety* ZAIC & FDCM SICA ZAIC & FDCM CCIC & NFICH CCIC & NFICH NFICH NFICH CGIC TCSCA TCSCA TCSCA TCSCA Bank of America Total: *CCIC - Continental Casualty Insurance Company CGIC – Chubb Group Insurance Companies FDCM – Fidelity and Deposit Company of Maryland NFICH - National Fire Insurance Company of Hartford SICA – Safeco Insurance Company of America TCSCA – Travelers Casualty and Surety Company of America ZAIC – Zurich American Insurance Company Amount $14,300,000 $40,000,000 $46,000,000 $28,304,188 $18,261,696 $ 6,261,536 $ 5,939,744 $15,000,000 $ 4,000,000 $28,000,000 $27,219,836 $11,800,000 $ 105,000 This information is presented in Attachment 10, Chapter 3, Volume 1 of

$245,192,000

Upon

approval

of

the

permit

renewal

application,

PWCC

will

provide

OSMRE

with

any

additional bond required by OSMRE pursuant to 30 CFR, Subchapter J.

Newspaper Notice and Proof of Publication, 774.15(b)(2)(iv) and 774.15(b)(3).

Attached is the proposed announcement of application for renewal of surface mining Permit AZ-0001D. According to 30 CFR 773.6(a)(b), 30 CFR 774.15(b)(2)(iv), and 30 CFR 778.21,

once the OSM has determined the application to be administratively complete and has approved the proposed newspaper notice, Peabody Western Coal Company will commence the publication process. A copy of the approved newspaper advertisement and proof of

publication will be filed with OSM and shall be made part of the renewal application within four weeks after the last date of publication. The announcement will be published

in the following two newspapers: the Navajo Times and Navajo Hopi Observer.

The advertisement and proof of publication shall be placed in Attachment 11, Chapter 3, Volume 1 of Kayenta Mine Permit AZ-0001D.

PUBLIC NOTICE

Pursuant to the Code of Federal Regulations (CFR), Title 30, Chapter VII, Subchapter E, Part 750 and Subchapter G, Parts 773 and 774, notice is hereby given that Peabody Western Coal Company (PWCC) has filed an application with the Office of Surface Mining Reclamation and Enforcement, Western Region (OSM) for renewal of Permit AZ-0001D covering mining operations at Kayenta Mine, Navajo County, Arizona. any terms and conditions of the existing coal The permit renewal does not affect and no new coal leases are

leases,

associated with the renewal. currently approved. 5, 2015.

No new permit area is proposed beyond that which is

The term of the renewed permit will be from July 6, 2010 through July

This notice is hereby given that:

1.

The name and business address of the applicant is:

Peabody Western Coal Company,

P. O. Box 650, Navajo Route 41, Kayenta, Arizona, 86033.

2.

The Kayenta Mine Permit AZ-0001D area is located in northeastern Arizona near the northern edge of Black Mesa within the protracted boundaries of Townships 35 through 37 North, Ranges 17 through 19 East. The operation is contained within the areas

shown on the following U.S. Geological Survey 7.5-minute quadrangle maps: Longhouse Valley, Marsh Pass S.E, Owl Spring, Great Spring, Yucca Hill, and Cliff Rose Hill. The permit area is located within the following lands of Navajo County, Arizona that are described relative to the Gila and Salt River Base Meridian.

T35N, R18E - Sections 13, 14, 24, 25, and 36; T35N, R19E - Sections 1-5 and 7-36; T36N, R17E - Sections 1-4, 11, and 12; T36N, R18E - Sections 1-18, 20, and 22-26; T36N, R19E - Sections 15-22, 25-30, and 32-36; T37N, R18E - Sections 28, 29, and 32-36. The permit area with important landmarks is shown on the map included with this public notice.

3.

An electronic copy of the application is available for review on the OSM, Western Region, Internet website at http://www.wrcc.osmre.gov. Paper copies of the

application are available for public and/or inspection at the following five listed locations:

Navajo Office Window Window

Nation Minerals Department of Surface Mining Rock Boulevard Rock, AZ 86515

Forest Lake Chapter House Navajo Route 41 20 miles north of Pinon Pinon, AZ 86510

Office of Surface Mining Reclamation and Enforcement 505 Marquette NW, Suite 1200 Albuquerque, NM 87102

The Hopi Tribe Office of Mining and Mineral Resources Highway 264 1 mile east of Kykotsmovi Kykotsmovi, AZ 86039

Office of Surface Mining Western Region 1999 Broadway, Suite 3320 Denver, CO 80202-3050

4.

The name and address of the OSM representative where written comments, objections, or requests for an informal conference may be submitted on or before 5:00 p.m., m.d.t., May 17, 2010, which is no less than thirty (30) days after the last publication date of the two papers is: Mr. Dennis Winterringer Office of Surface Mining Reclamation and Enforcement 1999 Broadway, Suite 3320 Denver, CO 80202-3050 (303) 293-5048 email: kayentarenewal@osmre.gov Per 30 CFR 773.6(c), any person having an interest that is or may be adversely affected by the decision on the application may request an informal conference. The request must briefly summarize the issues to be raised by the requestor and must sate whether the requester desires to have the conference conducted in the locality of the proposed operation.

Black Mesa Complex

p

PO Box 650 Kayenta, Arizona 86033

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1 inch equals 4 miles

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T36N, R17E

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Additional Updated Information, 774.15(b)(2)(v).

No new items are being submitted with this five-year Kayenta Mine Permit AZ-0001D renewal application to update information per 30 CFR 774.15(b)(2)(v). PWCC will provide

information during the technical review as required by OSM.