COMMONWEALTH OF VIRGINIA BEFORE THE DEPARTMENT OF MINES, MINERALS AND ENERGY COMPLIANCE AGREEMENT Purpose and I_ir_isdiction This is a Compliance AGREEMENT entered into between the Department of Mines, Minerals and Energy (DMME), Division of Mined Land Reclamation (DMLR) and the following corporater?husiness entities collectively hereafter referred to as the Justice Companies - A Coal Corporation, Virginia Fuel Corporation, Chestnut Land Holdings, L.L.C., Justice Low Seam Mining, Inc., Meg-Lynn Land Company, Joe, Black River Coal, L.L.C., and Baden Reclamation Company, Inc. The representations and undertakings provided for herein pertain only to the and the Justice Companies. The Justice Companies are permittees for the coal surface mining permits listed on Attachment A. The DMME has become concerned about timely abatement of violations issued to the Justice Companies? permits, timely payment of outstanding civil penalties associated with the violations listed in Attachment B, and the Justice Companies? level of commitment to perform reclamation and maintenance at both active and inactive permit sites. The purpose of this AGREEMENT is to provide assurance to DMME that the current and outstanding violations will be timely resolved, permit site maintenance will be done to prevent future violations, and reclamation of the sites as required in the approved detailed plans of the respective permits will be timely accomplished. This AGREEMENT sets out a plan for abatement of current violations, payment of outstanding civil penalties, and for commitments by the Justice Companies to maintain sufficient resources in equipment, personnel, and materials to meet the terms of the AGREEMENT and to communicate with DMLR regarding any deviations from the agreed schedule andfor conditions. The Justice Companies agree that is authorized to enforce the Virginia Coal Surface Mining Control and Reclamation Act (Title 45.1, Chapter 19 of the Code of Virginia, as amended) and the Virginia Coal Surface Mining Reclamation Compliance Agreement Justice Companies Page 2 of20 Regulations The Justice Companies further agree that the failure to with outstanding enforcement action, speci?cally failure to abate cessation orders issued under 30-843.] 103) could result in suspensionfrevocation of permit(s} andfor forfeiture of performance bond under . 19 and 4VAC25- 130-80050 It is the Justice Companies? intent and purpose to enter into this AGREEMENT to address the outstanding reclamation obligations so as to preclude permit revocation(s) or performance bond forfeiture(s). Facts 1. The Justice Companies and DMME agree to the accuracy of the following facts: A :52 Coal Corporation (A Coal) is the current permittee of record with the DMLR for active coal surface mining and reclamation operations under permit numbers 1301992, 1102003, 1102028, 1102042, 1302047, 1302048, 1102051, 1102052, 1502053, 1102054, 1502057, and 1 102058 in Wise County. Virginia Fuel Corporation (Virginia Fuel) is the current permittee of record with the DMLR for coal surface mining and reclamation operations under Virginia Coal Surface Mining Operation Permit Nos. 1102059, 1202070, 1302069, 1602078, 1602068, 1602071, 1602072, 1702073, 1602074, 1202076, 1102077, 1202075. Operations are located in Lee, Wise, and Dickenson Counties A Coal conducts coal surface mining operations under Baden Reclamation Company, Inc. (Baden Reclamation) Permit No. 1101953 in Dickenson County. Justice Low Seam Mining, Inc. (Justice Low ~?Seam) is the current permittee of record with the DMLR for coal surface mining and reclamation operations under Virginia Coal Surface Mining Operation Permit No. 1 102079 in Tazewell County. Compliance Agreement Justice Companies Page 3 of20 UI Meg-Lynn Land Company, Inc. (Meg-Lynn) is the current permittee of record with the DMLR for coal surface mining and reclamation operations under Virginia Coal Surface Mining Operation Permit Nos. 1101800 and 1 101824. As listed in Attachment B, DMLR has issued enforcement action and civil penalties to the Justice Companies? permits for violations of the andx?or approved permit requirements. Meg-Lynn?s Permit No. 1 101824 was issued - Notice of Violation No. JRJ0001 143 (violation 1 of 1) on September 17, 2013, requiring the operator to back?ll all existing highwall required to be eliminated, regrade and seed all disturbed areas on the permit. No mining activity has occurred on the permit since March 2013, and the 6 month temporary cessation expired on September 14, 2013. The abatement date to comply with JRJ0001 143 was December 17, 2013. Meg-Lynn has not complied with the NOV. {13) Cessation Order No. JRJ0001307 (violation 1 of l) on December 18, 2013 for failure to comply with JRJ0001 143, violation 1 of 1. A 8r. Coal?s Permit No. 1101905 was issued Notice of Violation No. 187' (violation 1 of 1) on October 8, 2013, requiring the operator to back?ll all existing highwall required to be eliminated, regrade and seed all disturbed areas on the permit. No mining activity has occurred on the permit since April 2013, and the 6 month temporary cessation expired on October 5, 2013. The abatement date to comply with was set for January 3, 2014. A Coal has not complied with the NOV. Cessation Order No. (violation 1 of 1) on January 13, 2014 for Failure to comply with JRJ0001 187, violation 1 of 1. A Coal?s Permit No. 1101914 was issued - Notice of Violation No. CEV0008373 (violation 1 of l) on August 13, 2012, requiring the construction of ponds 4A through 4F and maintenance of other ponds. A11 Compliance Agreement Justice Companies Page 4 of20 10. required work has been completed, except for the ?nishing work on the spillways of Ponds 4A and 4F, The abatement date has been extended to February 1, 2014. A Coal has not fully complied with the NOV. Notice of Violation No. (violation 1 of 2) on September 25, 2013, requiring the operator to construct andfor reconstruct all diversion ditches on the hollow fills identi?ed. The abatement date of (violation 1 of 2) has been extended to March 24, 2014. A Coal has not ?illy complied with the NOV. (0) Notice of Violation No. CEV0008382 (violation 1 of 1) on October 16, 2013, requiring the company to take all necessary measures so as to bring backfilling and regrading to a current status. No mining activity has occurred on the permit since April 2013, and the 6 month temporary cessation expired on October 5, 2013. The abatement date to comply with CEV0008832 was set fer January 14, 2014. A Coal has not complied with the NOV. Cessation Order No. (violation 1 of 1) on January 15, 2014 for failure to comply with CEV0003832, violation 1 of l. Baden Reclamation?s Permit No. 1101953 was issued - Notice of Violation No. WAC0009176 (violation 1 of 3) on June 24, 2013, requiring the back?ll and regrade of the highwall in Area 4. The abatement date was set for September 19, 2013. The NOV was not complied. (b)Notice of Violation No. WAC0009303 (violations 1 and 2 of 2) on September 5, 2013, requiring submittal of revision to revise the plans? cross sections and to backfill and regrade Area 1 or submit notice of temporary cessation. No mining activity has occurred on the permit since before August 2013. The NOVs were not complied by the set abatement dates ofOct. 9, 2013 and Dec. 3, 2013, respectively. Cessation Order No. WAC0009342 (violation 1 of l) on September 24, 2013 for failure to comply with WA00009176, violation 1 of 3- requiring the back?ll and regrade of the highwall in Area 4. A show cause order was issued October 10, 2013 to determine whether the permit should be suspended or revoked. Corn pliance Agreement Justice Companies Page 5 of 20 ll. 12. Cessation Order No. WAC0009427 (violation 1 of l) on November 22, 2013 for failure to comply with WAC0009303, violation 1 of 2, requiring submittal of revision to revise the plans? cross sections. Cessation Order No. WAC0009454 (violation 1 of l) on December 6, 2013 for failure to comply with WAC0009303, violation 2 of 2 - to back?ll and regrade Area 1 or submit notice of temporary cessation. (1) Notice of Violation No. WAC0009455 (violation 2 of 4) on December 6, 2013 requiring maintenance of Haulroads and and had the set abatement date of January 3, 2014. Cessation Order No. WAC0009500 (violation 1 of 1) on January 8, 2014 for failure to abate WAC0009455, violation 2 of 4. A Coal?s Permit No. 1101954 was issued Notice of Violation No. JRJ0001179 (violation 1 of l) on October 8, 2013, requiring the operator to back?ll all existing highwall required to be eliminated, regrade and seed all disturbed areas on the permit. No mining activity has occurred on the permit since March 2013, and the 6 month temporary cessation expired on September 23, 2013. The abatement date to comply with 0001 179 was set for January 8, 2014. A Coal has not complied with the NOV. Cessation Order No. (violation 1 of 1) on January 13, 2014 for failure to abate JRJ0001179, violation I of 1. A Coal?s Permit No. 1301992 was issued Notice of Violation No. JRJ0000169 (violation 1 of 1) on February 21, 2012 requiring the compliance with Revision Nos. 1005003 and 1002560 reclamation of silos disturbed area. The abatement date was extended several times from May 29, 2012 to May 30, 2013. Two ofthe six silos were demolished. Cessation Order No. JRJ0000976 (violation 1 of 1} on June 4, 2013 for failure to comply with 0000169. A Coal has not fully complied with the CO. Compliance Agreement Justice Companies Page 6 of'20 13. 14. 15. Determination of bond forfeiture on June 1 1, 2013 for failure to reclaim the silos and disturbed areas. A Coal?s Permit No. 1 102042 was issued Notice of Violation No. STJ0008546 (violation 1 of l) on June 4, 2013 requiring the operator to bring the back?lling and grading to a current status. No mining activity had occurred on the permit during temporary cessation status, which the 6 month limit expired on May 16, 2013. The abatement date to comply with STJ0008546 was September 23, 2013. A Coal did not comply with the NOV. Cessation Order No. STJ0008746 (violation 1 of 1) on October 3, 2013 for failure to comply with STJ0008546. A show cause order was issued November 12, 2013 to determine whether the permit should be suspended or revoked. Va. Fuel?s Permit No. 1 102059 was issued 4 Notice of Violation No. HGC0010204 (violation 1 of 1) on September 6, 2013 requiring the return of suf?cient equipment and personnei to resume back?lling of the ?nal pit. No work had been conducted to back?li the final pit since June 25, 2013. The abatement date to comply was set for October 20, 2013. Va. Fuel did not comply with the NOV. Cessation Order No. HGC0010329 (violation 1 of 1) on November 21, 2013 for failure to abate HGC0010204. A 8.: Coal?s Permit No. 1502053 was issued Notice of Violation No. LJJ0000693 (violation 2 of 2) on October 22, 2013 requiring the operator to reclaim the facility according to the approved plans. No mining activity has occurred on the permit since the 6 month temporary cessation expired on May 30, 2013. The abatement date to comply with was set for January 23, 2014. A 8.: Coal has not complied with the NOV. Compliance Agreement Justice Companies Page Coal?s Permit No. 1502057 was issued Notice of Violation No. JKC0000619 (violation 3 of 3) on September 16, 2013, requiring the operator to back?ll all remaining highwalls required to be eliminated, regrade, and seed all disturbed areas. No mining activity has occurred on the permit since the 6 month temporary cessation expired on May 18, 2013. The abatement date to comply with JKC0000619 was set for December 16, 2013. A 85 Coal has not complied with the NOV. Va. Fuel?s Permit No. 1602021 was issued Notice of Violation No. 1111000131? (violation 1 of l) on December 30, 2013 requiring the operator to back?ll all existing highwali required to be eliminated, regrade, and seed all disturbed areas on the permit. No mining activity has occurred on the permit since June 2013, and the 6 month temporary cessation for the 1?.72 acres expired on December 20, 2013. The abatement date to comply with JRJ0001317 was set for March 28, 2014. Va. Fuel?s Permit No. 1602078 was issued Notice of Violation No. JR10001315 {violation 1 of I) on December 30, 2013 requiring the operator to back?ll all existing highwall required to be eliminated, regrade, and seed all disturbed areas on the permit. No mining activity has occurred on the permit since June 2013, and the 6 month temporary cessation for the 80.3 acres expired on December 20, 2013. The abatement date to comply with JR10001315 was set for March 28, 2014. As noted in Attachment B, the Justice Companies have an outstanding ?nal civil penalties obligation totaling $1 18,63 0.00 as of January 8, 2014. As provided under and the failure to submit a ?nal civil penalty is subject to issuance of a show cause order. Compliance Agreement Justice Companies Page 8 of2l} AGREEMENT DMME and the Justice Companies by their signatures to this AGREEMENT agree as follows: This AGREEMENT addresses the violations identi?ed herein in Farts through i 9. Nothing in this AGREEMENT precludes DMME from taking any lawful action(s) regarding additional or subsequent violations after the date of entry of this AGREEMENT or expiration and non-compliance with any expired or expiring Notice of violation cited herein. The Justice Companies shall submit to DMME by January 16, 2014 a list of those permits identi?ed in Facts I and [3-18 that it has chosen to remain in temporary cessation status. Upon execution of this AGREEMENT, the Justice Companies will submit within [5 days of this signed AGREEMENT, permit revision applications to the DMLR for the permits that will continue in temporary cessation status that shall, pursuant to Va. Code 45.1-2 70.3F, calculate the total estimated cost of reclamation for all portions of the permitted sites which have been and continue to be in temporary cessation for greater than six months. Upon the approval of each revision application, the determined cost bond amount in a form required by 4VAC25- shall be submitted for that permit to the DMLR within 15 days of the revision"s approval. The DMLR may reduce the cost estimate to the applicable Pool Bond level once coal surface mining operations have been reactivated for mining with the necessary Spread(s) of equipment at the respective permit for no less than 60 continuous days. The permits in Facts 1 and 13-18 that will no longer remain in temporary cessation status shall be reactivated for mining with the appropriate spread(s) of equipment {per the respective approved permit?s plans) within 30 days of the executed AGREEMENT or reclamation of the disturbed areas will commence as noted in Attachment with the equipment listed in Attachment Compliance Agreement Justice Companies Page 9 of'ZD D. Justice Companies shall maintain suf?cient resources in equipment, personnel, and materials to meet the terms of this AGREEMENT and to immediately communicate in writing with DMLR (to the attention of the Division Director) regarding any deviation{s) from the agreed schedule (Attachment D) andfor conditions of this AGREEMENT. In the event equipment malfunction occurs, the Justice Companies shall cause the prompt repair of said equipment necessary for compliance with this AGREEMENT or replacement of such with equivalent functioning equipment within ?ve (5) working days. The appropriate ?eld inspectors and supervisors will be provided a copy of the executed AGREEMENT and shall monitor the compliance activities and progress for each applicable permit. The Inspector will notify the appropriate authorized Justice Companies? representative(s) of the status of progress and any concern regarding compliance for each respective permit. Each site visit will be documented by inspection report that the Inspector will send by electronic mail to the authorized representative(s) of the Justice Companies. A minimum of inspection per month per permit will be conducted by the DMME Inspector. The DMM IHSpector may conduct other site visitsfinspections on an irregular basis to document compliance progress on each respective permit. . ?eld and management staff will be available to discuss the status of compliance work under the AGREEMENT with the Justice Companies representative(s) as requested. . This AGREEMENT does not apply to the required maintenance and monitoring that the usticc Companies must continue to conduct on each permit as set forth in the respective approved permit?s plans. The Justice Companies shall complete the reclamation of Permit No. [301992 in accordance with Attachment Item #3 by no later than June 30, 2014. The Compliance Agreement Justice Companies Page 10 of20 will initiate performance bond collection in the event the company fails to meet any interim phasefobjective per Item unless the DMLR has ?rst been suf?ciently and timely informed of the reasons for such delay and has agreed to such. J. The Justice Companies shall submit the outstanding ?nal civil penalty total of $1 18,630 per Fact #19 to the DMLR with its submittal of the AGREEMENT to DMLR for the approval and signatures. Payment shall be made by cashier?s or certi?ed check made payable to the ?Treasurer of Virginia? and be submitted to the attention of the Hearings and Legal Services Of?cer. K. In the event the Justice Companies fail to comply with any provision of this AGREEMENT, without the prior consent or approval of the DMME, the DMME shall proceed with action to revoke and render a bond forfeiture determination of the particular permit(s). The Justice Companies shall have the right to request, in writing, administrative review of any subsequent show cause order or bond forfeiture determination within the applicable time limits set under the L. The Justice Companies agree by their authorized representative?s signature hereto that they have received full and fair process in this matter including all due process rights guaranteed under the constitutions of the United States and the Commonwealth of Virginia, as well as those rights extended by Virginia?s Administrative Process Act, and the sections following it, as well as the as currently amended. The Justice Companies hereby waive the right to any hearing or other administrative proceeding authorized or required by law or regulation herein regarding the issuance of the enforcement action and civil penalties listed in Facts 7-19 herein. Nothing, however, in this AGREEMENT shall be construed as a waiver of the right to . any administrative proceeding for, or to judicial review of, any action taken by DMME to enforce this AGREEMENT. Compliance Agreement Justice Companies Page 11 of 20 M. The Justice Companies and DMME agree that no alteration may be made to this AGREEMENT or approved addendums hereto, unless it is in writing, agreed upon by the parties, and executed by authorized representatives of the respective parties. N. Nothing herein affects or shall be construed to affect authorized enforcement actions any other federal, State, or local regulatory authority. 0. If any provision in the AGREEMENT is found unenforceable for any reason, the remainder of the AGREEMENT remains in full force and effect. Compliance Agreement Justice Companies Page 12 of 20 Signatorl Page By signature below, the Justice Companies voluntarily accept this AGREEMENT. By: n? 71 Date Name: James C. Justice, Title: Executive Vice President For: James C. Justice Companies, Inc. By signature below, the Director for the Division of Mined Land Reclamation acknowledges receipt of the signed AGREEMENT ?'om The Justice Companies. By: EAL dot/u Randy Casey Date Title: Director, or: Division of Mined Land Reclamation signature below, I hereby approve and accept this AGREEMENT, effective this date. an,? a. Title: Bradley C. rt Date Deputy Directo For: Department of Mines, Minerals and Energy Compliance Agreement Justice Companies Page 13 of 20 Attachment Permittee CSMO Perm?I A Coal Corporation I 101905 1101914 1 101917 1 101918 . 1 101954 1 101975 1 101991 1301992 1 102003 1 102028 1 102042 1302047 1302048 1 102051 1102052 1502053 1102054 1502057 1102058 Airway Resources, L.L.C. 1301742 Baden Reclamation Company, Inc. 1 101953 Cane Patch Mining Company, Inc. 1 101554 Chestnut Land Holdings L.L.C. 1302066 Justice Low-Seam Mining, Inc. 1 102079 Meg-Lynn Land Company, Inc. 1 101800 1 101824 Virginia Fuel Corporation 1 102059 1602068 1202070 1602071 1602072 1702073 1602074 1602078 Compliance Agreement Justice Companies Page 14 of 20 Attachment Outstanding Violations and Final Civil Penalties Permit Company PSC Issued Description '7 I13 111-11111 1 1311131? 3.: \1'1 1? . 1 Nix-?? . I 1' :Illi?il??fkhifgai I ?ith I 1.141111} tel? ilk 13113. arm-1 I. (1111i 1? 11111311121411 1;!1 Wis-111% I ('11 Inc. 1 101324 Meg-Lynn Land 11130001143 BR 17-Sep-13 1T-Dec?13 hack?lling 31'. regrading Sc seed Co. Inc. disturbed areas. 11101324 Meg-Lynn Land BR 13-Dec-13 NA Fta BR i Co. Inc. 111111122 1111111111139 99' ind-11:11 1101905 A 191 (3 Coal Corp. 11110001 13? BR 03-Oct-13] B-lan?14 TC expired 1015113 ?Willy: (101131111111 RN ?11? 3.335191 {1101914 A 13; Coal Corp. CEV0008858 DS 25-Sep-13 2-Dec-13 diversions breached '11019l4 A 19: Coal Corp. CEV0008832 BR 15-Oct-13 14-Jan-14 TC expired 1015113 hack?lling 131. regrading rill-11?1? Rx?danwniani ?11- 511111111? 7m 12". .17 9111' [11 Iliy "lid s? kid, IiiL I 101953 Baden Reclamation WAC0009303 A0 05-Sep-13 lS~Nov-13 WAC0009220 not complied - Co. Inc. revision 1 101953 Baden Reclamation WAC0009303 BR 05-Sep-13 3-Dec-l 3 failure to submit TC notice Area 1 Co. inc. _1 101953 Baden Reclamation WAC0009342 BR 24-Sep-13 NA fta NOV WAC0009 ['16 ER in area 4 1 CO. 111C. ?ii'im 4 11:10" "Li. 3?1 .1 1 101953 Baden Reclamation A0 [1122.113 NA "Fta NOW-1 WAC0009303 A0 . Co. Inc. :1101953 Baden Reclamation BR 15-Dec-13 NA Fta NOW 19111200093113 BR - Area 1 Co. Inc. 1 101953 Baden Reclamation WAC0009455 A0 4-Dec-13 3-Jan-l4 Anniversan' materials Co. [nc. 1 101953 Baden Reclamation WAC0009455 HR 4-Dec-13 3-Jan-l4 Haulroad Co. [nc. 11101953 Baden Reclamation wac0009455 SM 4-Dec?13 3-iae-14 iPerrnit sign Co. Inc. ii 111111115111"? 1111111113311 79-2" Emma .11 ?1111111111111. 511' 13 11191954 a a cdai Corp. 1111011111179 BR 03-Oct-I3 Tc expired 9153113 x13: mil (3.1111 14}; 11.02331} 5:1! 9 21301992 A Re Coal Corp. 1R10000169 21-Feb-12! 30-May-13 lRemove silos A 0 C991 Corp. AU 14-Jun-13! NA Fta NOVJR10000169 A0 - silos 11111211111 1W 1 .., :1 1112112151 1: 1 ml 151.11 1111111111111.? 111 Milli-1: at 1 :1 .11- [1:11 1.11m .NI 1111111115111, 111: 711-th ., 1? Compliance Agreement Justice Companies Page 15 of 20 Permit Company PSC Issued ?31:12:: ent Description I Ix: Immim I sun-err. .11 awf- - 41020426. Coal Corp. Isrmoossam 1 BR 5 31-May-13 23-Sep-13 Baum] regrade 1102042IA 63: Coal Corp. I ISTJ0003746 IBR I 03-Oct-13 NA .1121 NUWIES 1101108546 BR II 1:13.162 is: 1.1211111 t'm'n I711 I I?ll) I I Penulh uJ ?5411* ii {'nnl {Ram It I I I lk?m?x 1-: $555 11 {Neal Liam. I Tt?i .n 312.5er (Elli-.11 ('nm I Ir?muilx? .11 ?la-10*? I1502053IA 85 Cr Coal Corp. L110000693 I BR 22-Oct-13I 23-Jan-14 TC expired 51?301?13 711134154 8; (i ('0111 Cum 1 1111110111111 11161335 541131157 .1. 3; {1 (