Form 3400-12 Coal Lease

Form 3400-12
(January 2004)

UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT

FORM APPROVED
OMB NO. 1004-0073
Expires: January 31, 2007
Serial Number

COAL LEASE
PART 1. LEASE RIGHTS GRANTED

This lease, entered into by and between the UNITED STATES OF AMERICA, hereinafter called lessor, through the Bureau of Land Management (BLM), and
(Name and Address)

, for a period of 20 years and for so long thereafter as coal is produced in commercial
hereinafter called lessee, is effective (date)
/
/
quantities from the leased lands, subject to readjustment of lease terms at the end of the 20th lease year and each 10-year period thereafter.

Sec. 1. This lease is issued pursuant and subject to the terms and provisions of the:
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;
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 bonuses, 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 following described lands:

containing
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.
PART II. TERMS AND CONDITIONS

Sec. 1. (a) RENTAL RATE - Lessee must pay lessor rental annually and
in advance for each acre or fraction thereof during the continuance of
the lease at the rate of $
for each lease year.
(b) RENTAL CREDITS - Rental will not be credited against either
production or advance royalties for any year.
Sec. 2. (a) PRODUCTION ROYALTIES - The royalty will be
percent of the value of the coal 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 BLM
may accept, for a total o f not more than 10 years, the payment o f
advance royalties in lieu of continued operation, consistent with the
regulations. The advance royalty will be based on a percent o f 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 must maintain in the proper office a lease bond
in the amount of $
. The BLM may require an increase
in this amount when additional coverage is determined appropriate.
(Continued on page 2)

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 10 years will terminate the
lease. Lessee must submit an operation and reclamation plan pursuant
to Section 7 of the Act not later than 3 years after lease issuance.
The lessor reserves the power to assent to or order the suspension of the
terms and conditions o f 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 will 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 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 will 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 A N D INSPECTION - At such times and
in such form as lessor may prescribe, lessee must 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 must keep open at all reasonable times for the inspection by
B L M t h e l e a s e d p r e m i s e s and a l l surface and u n d e r g r o u n d
improvements, works, machinery, ore stockpiles, equipment, and
all books, accounts, maps, and records relative to operations, surveys,
or investigations on o r under the leased lands.
Lessee must 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 will be closed to inspection by the public in accordance with
the Freedom of Information Act (5 U.S.C. 552).
Sec. 7. D A M A G E S T O P R O P E R T Y A N D C O N D U C T OF O P E R A T I O N S Lessee must comply at its own expense with all reasonable orders of the
Secretary, respecting diligent operations, prevention of waste, and
protection of other resources.
Lessee must 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 must be submitted to the BLM.
Lessee must carry o n 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 o r users. Lessee must 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, and specification 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 must condition such uses to prevent
unnecessary or unreasonable interference with rights of lessee as may
b e consistent with concepts o f multiple use and multiple mineral
development.
Sec. 8. PROTECTION OF DIVERSE INTERESTS, A N D EQUAL OPPORTUNITY - Lessee must: 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 o f 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
should 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 should maintain segregated facilities.

Sec. 9. (a) T R A N S F E R S
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
will b e relieved o f all future obligations under the lease o r 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 must 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 must remove from the premises all other
structures, machinery, equipment, tools, and materials that it elects to
o r as required b y t h e BLM. Any such structures, machinery,
equipment, tools, and materials remaining on the leased lands
beyond 180 days, o r approved extension thereof, will become the
property of the lessor, but lessee may either remove any or all such
property or continue to be liable for t h e cost of removal a n d
disposal in the amount actually incurred by the lessor. If the surface is
owned by third parties, lessor will waive the requirement for removal,
provided the third parties do not object to such waiver. Lessee must,
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 O F 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 will be subject to cancellation by
the lessor only by judicial proceedings. This provision will 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 will not prevent later cancellation for the same default
occurring at any other time.
Sec. 12. HEIRS A N D SUCCESSORS-IN-INTEREST - Each obligation of
this lease will extend to and be binding upon, and every benefit hereof
will inure to, the heirs, executors, administrators, successors, o r
assigns of the respective parties hereto.
Sec.13. INDEMNIFICATION - Lessee must 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 Clean Water
Act (33 U.S.C. 1252 et seq.), the Clean Air Act (42 U.S.C. 4274 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

(Continued on page 3)

(Form 3400-12, page 2)

Sec. 15. SPECIAL STIPULATIONS (Cont'd.) -

The Privacy Act of 1974 and the regulation in 43 CFR 2.48(d) provide that you be furnished with the following information in connection with
information required by this application.
AUTHORITY: 30 U.S.C. 181-287 and 30 U.S.C. 351-359.
PRINCIPAL PURPOSE: BLM will use the information you provide to process your application and determine if you are eligible to hold a lease on
BLM Land.
ROUTINE USES: BLM will only disclose the information according to the regulations at 43 CFR 2.56(d).
EFFECT OF NOT PROVIDING INFORMATION: Disclosing the information is necessary to receive a benefit. Not disclosing the information may
result in BLM's rejecting your request for a lease.
The Paperwork Reduction Act of 1995 requires us to inform you that:
This information is being collected to authorize and evaluate proposed exploration and mining operations on public lands.
Response to the provisions of this lease form is mandatory for the types of activities specified.
BLM would like you to know that you do not have to respond to this or any other Federal agency-sponsored information collection unless it
displays a currently valid OMB control number.
BURDEN HOURS STATEMENT

Public reporting burden for this form is estimated to average one hour per response including the time for reading the instructions and
provisions, and completing and reviewing the form. Direct comments regarding the burden estimate or any other aspect of this
form to: U.S. Department o f the Interior, Bureau of Land Management (1004-0073), Bureau Information Collection Clearance
Officer (WO-630), 1849 C Street, Mail S t o p 401 LS, Washington, D.C. 20240.

THE UNITED STATES OF AMERICA

By
(Company or Lessee Name)

(Signature of Lessee)

(BLM)

(Title)

(Title)

(Date)

(Date)

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.
(Form 3400-12, page 3)