Form 3400-12 Coal Lease

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Form 3400-12
(April 2007)

UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT

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FORM APPROVED
OMB NO. 1004-0073

Expires: March 31, 2010
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)

hereinafter called lessee, is effective (date)
/
/
, for a period of 20 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 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.

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 of this lease in accordance with, inter alia, Section 39 of
the Mineral Leasing Act, 30 U.S.C. 209.

(b) ADVANCE ROYALTIES - Upon request by the lessee, the BLM 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 will 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.

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.

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.

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. 4. DILIGENCE - This lease is subject to the conditions of diligent
development and continued operation, except that these conditions are excused
(Continued on page 2)

Sec. 6. DOCUMENTS, EVIDENCE AND 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 BLM 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 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. DAMAGES TO PROPERTY AND CONDUCT OF OPERATIONS 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 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 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 be
consistent with concepts of multiple use and multiple mineral development.
Sec. 8. PROTECTION OF DIVERSE INTERESTS, AND 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
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 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) TRANSFERS
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 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 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 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 or as required by the BLM. Any such
structures, machinery, equipment, tools, and materials remaining on the leased
lands beyond 180 days, or 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 the cost of removal and 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 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 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 AND 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, or 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 UNITED STATES OF AMERICA

_____________________________________________________________
(Company or Lessee Name)

By _________________________________________________________

_____________________________________________________________
(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.

NOTICES
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:
The BLM collects this information 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.
The 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 of the Interior, Bureau of Land Management (1004-0073), Bureau Information Collection
Clearance Officer (WO-630), 1849 C Street, Mail Stop 401 LS, Washington, D.C. 20240.
(Form 3400-12, page 3)