OFFICE OF SURFACE MINING RECLAMATION & ENFORCEMENT
For Release November 24, 1993
Jerry Childress (202) 208-2719

OSM SETTLES $900,000 RECLAMATION FEE CLAIM WITH PEABODY COAL CO.

The Interior Department's Office of Surface Mining Reclamation and
Enforcement (OSM) today announced it has signed an agreement with
the Peabody Western Coal Company which settles a reclamation fee
claim in excess of $900,000.

Under the agreement, Peabody has paid $900,000 of a government
claim for $949,923, which includes $517,650 for overdue reclamation
fees, $262,080 for interest, and $170,144 for late payment
penalties.

The claim for delinquent reclamation fees resulted from an OSM
audit of Peabody surface coal raining operations at sites in
Arizona, Montana, and Colorado, during the period January 1, 1983,
through June 30, 1992. Based on the audit report, OSM concluded
that during tiffs period Peabody Western did not properly report
tonnage and pay reclamation fees owed. Peabody Western disputed the
conclusion and maintains that it correctly reported and paid
reclamation fees.

"Since both OSM and Peabody Western recognize that settlement of
their differences through judicial proceedings would be costly and
time consuming, an agreement was reached whereby OSM will accept
$120,269 as a late penalty charge and will waive administrative
fees," said OSM acting Director Anne H. Shields.

The audit report covered Peabody Western operations at the Seneca
Strip Mine in Colorado, the Big Sky Mine in Montana, and the Black
Mesa and Kayenta Mines on Navajo and Hopi Indian lands in Arizona.
OSM officials said that half of the fees collected for operations
at the Navajo and Hopi sites will be allocated to the tribes' share
of the national Abandoned Mine Reclamation Fund -- $205,162 to the
Navajo and $52,314 to the Hopi.

Under the 1977 surface mining law, coal producers are required to
pay 35 cents per ton of surface-mined coal into the Abandoned Mine
Reclamation Fund. Underground coal mines pay 15 cents per ton. The
money pays for state, federal, and tribal projects to restore
abandoned coal mine lands that were left unreclaimed, or
inadequately reclaimed, before the surface mining law was enacted.
OSM conducts audits of coal producers to make sure all tonnage is
reported and all reclamation fees are paid.

-DOI-