DAQ-2024-012121

DAQE-AN142970002-24

{{$d1 }}

Mark Reynolds
Hiawatha Coal Company
P.O. Box 1406
Huntington, UT 84528
[e-mail]

Dear Mr. Reynolds:

Re: Approval Order: Administrative Amendment to Approval Order BAQE-502-89 for a 10-Year
Review and Permit Updates
Project Number: N142970002

The attached Approval Order (AO) is issued pursuant to the Division of Air Quality conducting a
10-year administrative review of this source and its respective AO. Hiawatha Coal Company must
comply with the requirements of this AO, all applicable state requirements (R307), and Federal
Standards.

The project engineer for this action is Christine Bodell, who can be contacted at [phone] or
[e-mail]. Future correspondence on this AO should include the engineer's name as well as the
DAQE number shown on the upper right-hand corner of this letter.

Sincerely,

{{$s }}

Bryce C. Bird
Director

BCB:CB:jg

cc: Southeastern Utah District Health Department

195 North 1950 West • Salt Lake City, UT
Mailing Address: P.O. Box 144820 • Salt Lake City, UT 84114-4820
Telephone [phone] • Fax [phone] • T.D.D. [phone]
www.deq.utah.gov
Printed on 100% recycled paper
State of Utah

SPENCER J. COX
Governor
DEIDRE HENDERSON
Lieutenant Governor

Department of
Environmental Quality

Kimberly D. Shelley
Executive Director

DIVISION OF AIR QUALITY
Bryce C. Bird
Director

December 5, 2024

STATE OF UTAH
Department of Environmental Quality
Division of Air Quality

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APPROVAL ORDER
DAQE-AN142970002-24 Administrative Amendment
to Approval Order BAQE-502-89 for a 10-Year Review
and Permit Updates

Prepared By
Christine Bodell, Engineer
[phone]
[e-mail]

Issued to
Hiawatha Coal Company - King #4 Mine

Issued On
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Issued By

{{$s }}

Bryce C. Bird
Director
Division of Air Quality

December 5, 2024
TABLE OF CONTENTS

TITLE/SIGNATURE PAGE ....................................................................................................... 1
GENERAL INFORMATION ...................................................................................................... 3
CONTACT/LOCATION INFORMATION ............................................................................... 3
SOURCE INFORMATION ........................................................................................................ 3
General Description ................................................................................................................ 3
NSR Classification .................................................................................................................. 3
Source Classification .............................................................................................................. 3
Applicable Federal Standards ................................................................................................. 3
Project Description.................................................................................................................. 4
SUMMARY OF EMISSIONS .................................................................................................... 4
SECTION I: GENERAL PROVISIONS .................................................................................... 4
SECTION II: PERMITTED EQUIPMENT .............................................................................. 5
SECTION II: SPECIAL PROVISIONS ..................................................................................... 5
PERMIT HISTORY ..................................................................................................................... 7
ACRONYMS ................................................................................................................................. 8

DAQE-AN142970002-24
Page 3

GENERAL INFORMATION

CONTACT/LOCATION INFORMATION

Owner Name Source Name
Hiawatha Coal Company Hiawatha Coal Company - King #4 Mine

Mailing Address Physical Address
P.O. Box 1406 Huntington, UT 84528 Just Off Intersection of Hiawatha & North 100 West
Hiawatha, UT

Source Contact UTM Coordinates
Name: Mark Reynolds 499,126 m Easting
Phone: [phone],370,578 m Northing
Email: [e-mail] Datum NAD83
UTM Zone 12
SIC code 1221 (Bituminous Coal & Lignite Surface Mining)

SOURCE INFORMATION
General Description
Hiawatha Coal Company operates a coal mine in Hiawatha, Carbon County. The coal is transported to the
surface by conveyor belts and processed via screens and crushers. The coal is then transported by
conveyor to the storage piles, where it is loaded into haul trucks by the load-out conveyors or loader and
transported off-site.

NSR Classification
10-Year Review

Source Classification
Located in Attainment Area
Carbon County
Airs Source Size: B

Applicable Federal Standards
NSPS (Part 60), A: General Provisions
NSPS (Part 60), Y: Standards of Performance for Coal Preparation and Processing Plants
Title V (Part 70) Area Source
DAQE-AN142970002-24
Page 4

Project Description
This administrative amendment is to Approval Order BAQE-502-89, dated July 25, 1989. The DAQ is
conducting a 10-year review and is updating the language and format. There are no changes to the
operations taking place at the Hiawatha Coal Company King #4 Mine.

SUMMARY OF EMISSIONS

The emissions listed below are an estimate of the total potential emissions from the source. Some
rounding of emissions is possible.

Criteria Pollutant Change (TPY) Total (TPY)
Particulate Matter - PM10 6.40
Particulate Matter - PM2.5 6.40

SECTION I: GENERAL PROVISIONS

I.1 All definitions, terms, abbreviations, and references used in this AO conform to those used in the UAC R307 and 40 CFR. Unless noted otherwise, references cited in these AO conditions refer to those rules. [R307-101]
I.2 The limits set forth in this AO shall not be exceeded without prior approval. [R307-401] I.3 Modifications to the equipment or processes approved by this AO that could affect the emissions covered by this AO must be reviewed and approved. [R307-401-1]
I.4 All records referenced in this AO or in other applicable rules, which are required to be kept by the owner/operator, shall be made available to the Director or Director's representative upon request, and the records shall include the two-year period prior to the date of the request. Unless otherwise specified in this AO or in other applicable state and federal rules, records shall be kept for a minimum of two (2) years. [R307-401-8] I.5 At all times, including periods of startup, shutdown, and malfunction, owners and operators shall, to the extent practicable, maintain and operate any equipment approved under this AO, including associated air pollution control equipment, in a manner consistent with good air pollution control practice for minimizing emissions. Determination of whether acceptable operating and maintenance procedures are being used will be based on information available to the Director which may include, but is not limited to, monitoring results, opacity observations, review of operating and maintenance procedures, and inspection of the source. All maintenance performed on equipment authorized by this AO shall be recorded. [R307-401-4]
I.6 The owner/operator shall comply with UAC R307-107. General Requirements: Breakdowns. [R307-107] I.7 The owner/operator shall comply with UAC R307-150 Series. Emission Inventories. [R307-150]
DAQE-AN142970002-24
Page 5

SECTION II: PERMITTED EQUIPMENT

II.A THE APPROVED EQUIPMENT II.A.1 King #4 Coal Mine
II.A.2 One (1) Scalper Screen II.A.3 One (1) Hammer Mill
II.A.4 One (1) Storage Silo Capacity: 100 tons II.A.5 Storage Piles Size: 13,000 tons
II.A.6 Five (5) Conveyors II.A.7 One (1) Loader/Dozer *For information purposes only*

SECTION II: SPECIAL PROVISIONS II.B REQUIREMENTS AND LIMITATIONS
II.B.1 Site-Wide Requirements II.B.1.a The owner/operator shall not allow visible emissions from the following emission points to exceed the following values: A. All crushers - 15% opacity B. All screens - 10% opacity C. All conveyor transfer points - 10% opacity D. Conveyor drop points to storage piles - 20% opacity E. All other points - 20% opacity. [R307-401-8]
II.B.1.a.1 Opacity observations of emissions from stationary sources shall be conducted according to 40 CFR 60, Appendix A, Method 9. [R307-401-8] II.B.1.a.2 For intermittent sources, opacity observations shall be conducted using Method 9; however, the requirement for observations to be made at 15-second intervals over a six-minute period shall not apply. The number of observations and the time period shall be determined by the length of the intermittent or mobile source operation. Any time interval with no visible emissions shall not be included. [R307-309-5]
DAQE-AN142970002-24
Page 6

II.B.1.b The owner/operator shall not produce more than the following: A. 1,000,000 tons of coal per rolling 12-month period B. 500 tons of coal per hour. [R307-401-8]
II.B.1.b.1 The owner/operator shall: A. Determine coal production by state mining reports
B. Use the production records to calculate a new rolling 12-month total by the 1st day of each month using data from the previous 12 months
C. Keep production records for all periods the plant is in operation.

[R307-401-8]
II.B.1.c The owner/operator shall comply will all applicable requirements of 40 CFR 60 Subpart Y (Standards of Performance for Coal Preparation and Processing Plants). [40 CFR 60 Subpart Y, R307-401-8]
II.B.2 Roads and Fugitive Dust Requirements
II.B.2.a The owner/operator shall use water application and/or chemical suppressants for all unpaved haul roads and unpaved operational areas used by mobile equipment at all times and to maintain opacity limits listed in this AO. The application rate of water shall be no less than 0.25 gallons per square yard and shall be made no less than every 2 hours, unless daily rainfall exceeds 0.10 of an inch, the road is in a damp condition, or the road is covered in snow. If chemical treatment is to be used, the plan must be approved by the Director. [R307-401-8]
II.B.2.a.1 Records of water and/or chemical suppressant application shall be kept for all periods when the plant is in operation. The records shall include the following items:

A. Date and time of day treatments were made
B. Number of treatments made, quantity of water applied, and chemical dilution ratio
C. Rainfall amount received, if any, and the approximate amount.

[R307-401-8]
II.B.2.b The owner/operator shall properly maintain and clean the existing paved haul road to minimize fugitive emissions. [R307-401-8]
II.B.2.c The owner/operator shall not exceed a haul road speed limit of 20 miles per hour. [R307-401-8]

II.B.2.d The owner/operator shall not exceed a length of 1.0 miles for the on-site haul road. [R307-401-8]
II.B.2.e The owner/operator shall install water sprays or chemical dust suppression sprays at all of the
following points on site to control fugitive emissions:

A. All crushers

B. All screens.

[R307-401-8]

DAQE-AN142970002-24
Page 7

II.B.2.e.1 The sprays shall be operated whenever dry conditions warrant and to maintain the opacity limits listed in this AO. [R307-401-8] II.B.2.f The owner/operator shall maintain a coal moisture content of no less than 5.0% by weight. [R307-401-8]

II.B.2.f.1 The moisture content shall be tested if directed by the Directors using the appropriate ASTM method. [R307-401-8]
II.B.2.g The owner/operator shall apply water to all storage piles on site to control fugitive emissions as dry condition warrant and to maintain the opacity limits listed in this AO. [R307-401-8]

PERMIT HISTORY

This Approval Order shall supersede (if a modification) or will be based on the following documents:
Supersedes Approval Order BAQE-502-89 dated July 25, 1989
DAQE-AN142970002-24
Page 8

ACRONYMS

The following lists commonly used acronyms and associated translations as they apply to this document:

40 CFR Title 40 of the Code of Federal Regulations
AO Approval Order
BACT Best Available Control Technology
CAA Clean Air Act
CAAA Clean Air Act Amendments
CDS Classification Data System (used by Environmental Protection Agency to classify
sources by size/type)
CEM Continuous emissions monitor
CEMS Continuous emissions monitoring system
CFR Code of Federal Regulations
CMS Continuous monitoring system
CO Carbon monoxide
CO2 Carbon Dioxide
CO2e Carbon Dioxide Equivalent - Title 40 of the Code of Federal Regulations Part 98,
Subpart A, Table A-1
COM Continuous opacity monitor
DAQ/UDAQ Division of Air Quality
DAQE This is a document tracking code for internal Division of Air Quality use
EPA Environmental Protection Agency
FDCP Fugitive dust control plan
GHG Greenhouse Gas(es) - Title 40 of the Code of Federal Regulations 52.21 (b)(49)(i)
GWP Global Warming Potential - Title 40 of the Code of Federal Regulations Part 86.1818-
12(a)
HAP or HAPs Hazardous air pollutant(s)
ITA Intent to Approve
LB/YR Pounds per year MACT Maximum Achievable Control Technology MMBTU Million British Thermal Units NAA Nonattainment Area NAAQS National Ambient Air Quality Standards NESHAP National Emission Standards for Hazardous Air Pollutants NOI Notice of Intent
NOx Oxides of nitrogen
NSPS New Source Performance Standard
NSR New Source Review
PM10 Particulate matter less than 10 microns in size
PM2.5 Particulate matter less than 2.5 microns in size
PSD Prevention of Significant Deterioration
PTE Potential to Emit
R307 Rules Series 307
R307-401 Rules Series 307 - Section 401
SO2 Sulfur dioxide
Title IV Title IV of the Clean Air Act
Title V Title V of the Clean Air Act
TPY Tons per year
UAC Utah Administrative Code
VOC Volatile organic compounds

Christine Bodell <[e-mail]>
Hiawatha Air Quality Approval Order
Charles Reynolds <[e-mail]>Thu, Oct 10, 2024 at 5:58 PM
To: Christine Bodell <[e-mail]>
Cc: [e-mail], Mark Reynolds <[e-mail]>, [e-mail]
Christine,
Sorry for the delayed response. I did not see your email until you called me yesterday. Here are the answers to your questions:
1. The UTM coordinates (taken from Google Maps) is:
39.484762, -111.010181
Attached is a screenshot showing the minesite.
2. The attached purchase agreement transferred the UDOGM permit and all other permits from U.S. Fuel Company to Hiawatha Coal
Company.
3. The mailing address is:
Hiawatha Coal Company
P.O. Box 1406
Huntington, Ut 84528
4. The primary contact person will be Mark Reynolds. His contact information is:
Mark Reynolds
Email: [e-mail]
Cell Phone: [phone]
Please let me know if you need anything else.
Sincerely,
Charles Reynolds
Mine Manager
[Quoted text hidden]
3 attachments
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Hiawatha U.S. Fuel Agreement.pdf
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(
AGREEMENT

This AGREEMENT ("Agreement") is made as of the 20th day of June 1997, by and
between UNITED STATES FUEL COMPANY, a Nevada corporation ("U.S. Fuel"), and
HIAWATHA COAL COMPANY, INC., a Utah corporation ("Buyer").
R E CIT A L S:
A. U.S. Fuel is the owner of a Mining Permit described herein under which it
formerly operated now inactive coal mines and is currently performing reclamation at or
near Hiawatha, in Carbon and Emery Counties, Utah ("Hiawatha Site") and certain other
permits ("Other Permits") listed on Exhibit A attached hereto.
B. Buyer desires to acquire and U.S. Fuel is willing to transfer the Mining Permit
and Other Permits to Buyer in accordance with and specifically subject to all of the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the promises and covenants contained
herein and of the benefits to be derived by the parties under this Agreement, it is hereby
agreed as follows:
ARTICLE I: DEFINITIONS
1.1 Closing means the execution and delivery of all documents necessary for the
transfer of the Mining Permit and Other Permits to Buyer, and payment of the net
Purchase Price due U.S. Fuel into Escrow.
1.2 Closing Date means July 26, 1997 or such other date to which the parties
agree.
1.3 Completion of Transaction shall have the meaning described in Article 9.
1.4 Completion of Transaction Date means the date and place not later than five
(5) banking days after the Determination Date.
1.5 Consideration means the amount of reclamation bond set out in Section 3.1.
1.6 Determination Date means the date the State of Utah Division of Oil, Gas
and Mining ("DOGM") approves the transfer of U.S. Fuel's Mining Permit Number ACT
007/011 to Buyer and accepts Buyer's substitute reclamation bond in place of U.S. Fuel's
existing reclamation bonds.
I
,
(
1.7 Disturbed Lands shall mean the lands used by U.S. Fuel under Mining Permit
Number ACT 007/011 for active mining and all other operations authorized or covered by ,(
said Mining Permit, including lands used for actual mining operations, land on which all
processing facilities are or were placed, land used for settling ponds, land used for the
storage of coal and mining waste, land used for roads, and land on which other facilities
or improvements were constructed, placed or used by U.S. Fuel.
1.8 Final Termination Date shall have the meaning set forth in Section 10.2.
1.9 Mining Permit means renewed Permit Number ACT 007/011 issued
March 14, 1997 by DOGM to U.S. Fuel for the Hiawatha mines complex as defined in the
Mining Permit, and all approvals, waivers, variances and amendments and all applications
therefor or for modification thereof or any similar permit or permits which may replace
Permit Number ACT 007/011.
1.10 Reclamation Bond means the performance bond required under the Mining
Permit.
ARTICLE 2: SALE AND ASSIGNMENT
2.1 Properties Sold and Assigned.
Subject to the terms and conditions hereinafter set forth, on the Closing Date, U.S.
Fuel agrees to sell, assign, transfer and deliver to Buyer and Buyer agrees to acquire and
accept a/l of U.S. Fuel's right, title and interest in the Mining Permit and Other Permits for
the consideration hereinafter set forth.~(
ARTICLE 3: CONSIDERATION
3.1 Consideration.

The consideration from Buyer to U.S. Fuel for transfer of the Mining Permit and

(
Other Permits shall be the replacement, by Buyer, of the reclamation bonding for U.S.
Fuel's Reclamation Bonds in an amount sufficient for U.S. Fuel's Mining Permit and
remaining reclamation obligations determined by DOGM, currently estimated by DOGM
to be increased from the existing bond amount of Two Million Eight Hundred Thirty-eight
Thousand Dollars ($2,838,000) to Three Million One Hundred Thousand Dollars
($3,100,000).
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ARTICLE 4: PRE-CLOSING OBLIGATIONS OF THE PARTIES.
4.1 Availability of Information.
( Upon execution of this Agreement, U.S. Fuel agrees, if it has not already done so,
to make available to Buyer and shall provide Buyer and its officers, employees and
representatives, full opportunity and access at reasonable times to review and examine
data, information, documents and other material if any exists, as described in Sections
4.2, 4.3, 4.4 and 4.5, relating to the Mining Permit and Other Permits in U.S. Fuel's
possession or control or to which U.S. Fuel has access. Buyer shall have the right to
make copies of such contained in the files of U.S. Fuel or to which U.S. Fuel has access,
( as Buyer may reasonably request, and U.S. Fuel agrees to provide such written
authorization as may be appropriate and necessary for Buyer to review the described data
and information.
4.2 Title Information.(
Agreements, leases, title opinions, status reports and Mining Permit and Other
Permits records located at U.S. Fuel's offices in Helper, Utah. Buyer shall review all such
information and may make such additional title examination, at its expense, as it deems
( necessary to satisfy itself as to the status of U.S. Fuel's right, title and interest in and to
the Mining Permit and Other Permits.
4.3 Technical Information.
Mining and engineering information, reclamation plans, bonds, exploration and
mining permits, environmental reports and surveys.
4.4 Other Information and Inspection.

Subject to all regulatory agency requirements, the officers, employees, and other

( representatives of Buyer shall, at their own risk, have the right of access during normal
business hours, upon reasonable notice to U.S. Fuel, to any workings, shafts, buildings,
etc. for the purposes of verifying information and otherwise inspecting the area covered
by the Mining Permit.
4.5 Confidentiality of Data.
(a) Buyer and its representatives and affiliates shall treat all proprietary
information of U.S. Fuel obtained by it as confidential. Buyer may disclose such
information only to its consultants and financial brokers and institutions provided
it first secures similar confidentiality commitments from such entities and persons.
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I
In the event this Agreement is terminated without Buyer acquiring the Mining
Permit, Buyer shall return to U.S. Fuel all copies made by Buyer and its
representatives and affiliates of information received from U.S. Fuel and other data
and information taken from U.S. Fuel's offices in connection with the proposed
transaction, and shall also deliver to U.S. Fuel any data and information generated
by Buyer or for its account; and thereafter may not disclose or use any information
obtained from U.S. Fuel or relating to the Permits in any way; and
(b) U.S. Fuel and its representatives and affiliates will require Buyer to
furnish financial information reflecting Buyer's ability to complete this transaction
and, if furnished, U.S. Fuel agrees to treat all such information obtained by it as
proprietary and confidential. In the event of termination, U.S. Fuel shall return to
Buyer all copies made by U.S. Fuel and its representatives and affiliates of such
information received from Buyer and not use any such information obtained from
Buyer in any way. U.S. Fuel may disclose such information to its consultants and
financial brokers and institutions provided it first secures similar confidentiality
commitments from such entities and persons.
4.6 Application.
Promptly after the execution hereof, Buyer shall apply to DOGM for approval of
transfer of the Mining Permit to Buyer and exercise its best reasonable efforts thereafter
to satisfy all requirements of DOGM in order to obtain conditional approval to the transfer
and the release of U.S. Fuel from all further reclamation obligations under the Mining
Permit, with such approval to be effective upon the Completion of Transaction and receipt
by DOGM of a substitute reclamation bond in place of U.S. Fuel's existing reclamation
bonds.
ARTICLE 5: CLOSING
As soon as possible but, in any event, not less than three (3) days prior to the
Closing Date and in the absence of a notice from Buyer to U.S. Fuel that it is no longer
interested in acquiring the Permits, the following shall occur:
5.1 Assignment of Permit and Designation of Operator.
(a) U.S. Fuel agrees to promptly execute and deliver to Buyer an
Assignment of the Mining Permit and a Designation of Operator of the portion of
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! (
U.S. Fuel Properties subject to the Mining Permit in the forms of Exhibits B-1 and
B-2, respectively.
(b) Upon receipt of the Assignment of the Permit and Designation of
Operator, Buyer agrees to promptly comply with all outstanding regulatory
requirements imposed by DOGM to complete the final approval process for transfer
of the Mining Permit, including filing of a substitute reclamation bond.
(c) Upon delivery to Buyer of the Designation of Operator, Buyer shall be
responsible for any and all obligations required for maintenance and reclamation of
the area covered by the Mining Permit and deemed to have assumed possession
and orderly supervision of the area of the Mining Permit during the period prior to
Other Permits transfer documents being delivered to Buyer on the Completion of
Transaction Date described in this Agreement. Buyer agrees to indemnify and hold
U.S. Fuel harmless and defend U.S. Fuel against any and all claims, demands,
suits, costs (including reasonable attorneys' fees), judgments, damages, losses,
fines, liabilities and costs arising or related to the business, operations, or conduct
of Buyer occurring during such period until the Other Permits transfer documents
are delivered to Buyer on the Completion of Transaction Date.
ARTICLE 6: REPRESENTATIONS
6.1 Representations of U.S. Fuel.
(a) The consummation of the transaction represented by this Agreement will
not result in a breach of any terms and conditions of or be construed as a default
under any agreement or other instrument to which U.S. Fuel is a party and will not
violate or conflict with any contracts, governmental or otherwise, to which U.S.
Fuel is a party or is bound.
(b) It has all requisite corporate power and authority to enter into this
Agreement and to perform its obligations under this Agreement. The
consummation of the transaction contemplated by this Agreement will not violate,
nor be in conflict with, any provision of its charter or by-laws, or any agreement
or instrument to which it is a party or is bound.
(c) The execution, delivery and performance of this Agreement and the
transaction contemplated hereby have been duly and validly authorized by all
requisite corporate action by U.S. Fuel and its parent, Arava Natural Resources
Company, Inc. (hereafter referred to as "ARAVAn).
(d) Prior to the execution of this Agreement and prior to the Completion of
Transaction Date, U.S. Fuel will not convey, assign, transfer, encumber, mortgage
or dispose of, or consent to the conveyance or disposition of, any of the permits.
(e) To the best of U.S. Fuel's knowledge, except as otherwise described in
Exhibit A, no suit, administrative enforcement or other proceedings are pending or
threatened before any court or governmental agency seeking to restrain, prohibit
or declare illegal the mining operations previously conducted under the Permits;
there is no action or proceeding which would prevent or hinder this transaction.
(f) The execution and delivery of the instruments contemplated by this
Agreement will assign and transfer all of U.S. Fuel's right, title and interest in and
to the Permits to the extent transferable. The transfer of Permits is subject to such
third party consents as may be required to confirm and/or approve the same. U.S.
Fuel agrees to cooperate with and assist Buyer, if requested, to obtain third party
consents as Buyer seeks such third party consents, which Buyer identifies in
writing to U.S. Fuel either prior to or after Closing.
6.2 Representations of Buyer.
Buyer represents that:
(a) It is, and following execution of this Agreement continue to be, an entity
duly organized, existing and in good standing under the laws of the State of Utah
and qualified to do business in the State of Utah.
(b) It has all requisite power and authority to enter into this Agreement and
to perform its obligations under this Agreement. The consummation of the
transaction contemplated by this Agreement will not violate, nor be in conflict with,
any provision of its charter or by-laws, or any agreement or instrument to which
it is a party or is bound.
(c) The execution, delivery and performance of this Agreement and the
transaction contemplated hereby have been duly and validly authorized by all
requisite organizational action of Buyer and any parent organization.
(d) The consummation ofthe transaction represented by this Agreement will
not result in a breach of any terms and conditions of or be construed as a default
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I
under any agreement or other instrument to which Buyer is a party and will not
violate or conflict with any contracts, governmental or otherwise, to which Buyer
is a party or is bound.
(e) To the best of its knowledge, no suit or other proceedings are pending
or threatened before any court or governmental agency seeking to restrain, prohibit
or declare illegal, this transaction.
(f) Prior to completion of the transaction, Buyer will not convey, assign,
transfer, encumber, mortgage or dispose of, or consent to the conveyance or
disposition of its interest under this Agreement without obtaining U.S. Fuel's
approval in advance, which approval shall not be unreasonably withheld.
6.3 Representation of ARAVA.
ARAVA, as parent company of U.S. Fuel, unconditionally represents that it
approves of the transfer of assets set out within this Agreement by its wholly owned
subsidiary U.S. Fuel to Buyer and that all requisite corporate authority has been obtained
by ARAVA to approve the transfer.
ARTICLE 7: CONDITION OF PROPERTIES
7.1 Acknowledgment by Buyer.
Buyer and its representatives and affiliates recognize that the Mining Permit and
Other Permits relate to known mines and mine facilities which operated for many years
but, more recently, have been in a non-operating status; that prior to execution of the
Agreement, Buyer and its representatives have conducted an investigation and inspection
and are aware of their present condition, acknowledging that the Mining Permit and Other
Permits sold and assigned pursuant to this Agreement are not part of an active
underground mining operation; that, beginning in 1993, all coal production from
underground mining previously conducted by U.S. Fuel on the properties was terminated,
the mines closed, the portals sealed, all former employees (except a small skeleton crew
retained for mining reclamation and related work) were terminated, and, since 1993,
neither the skeleton crew nor any other persons have engaged in any underground mining
operations on the Properties; that U.S. Fuel is making no representations as to such
condition; and that Buyer is acquiring the Permits on an "as is" and "where is" basis,
recognizing the present physical and environmental condition of the mines and mine
facilities, without warranty.
I
'.

(
(
7.2 Transfer of Mining Permit Approval. Buyer shall complete all requirements
of DOGM and OSM for approval of the transfer of U.S. Fuel's Mining Permit number ACT
007/011 to Buyer and, upon such approval, Buyer agrees to assume and satisfy all
liabilities and assume and perform all obligations of the Mining Permit and Other Permits
and U.S. Fuel's Reclamation Plan.
ARTICLE 8: CONDITIONS OF COMPLETION OF TRANSACTION
Unless waived in writing by the parties, the obligations of U.S. Fuel and Buyer to
consummate the transaction contemplated hereby are subject to satisfaction of each of
the following conditions:
8.1 Regulatory Notices.
There are no existing DOGM Notices of Violation and no federal, state, county,
municipal or other statute, rule, regulation, proceeding, action or order or adverse federal
or similar state Applicant Violator System (AVS) listing shall exist or shall have been
adopted or taken, and no judicial or administrative decision shall have been entered
(whether preliminary or final), which would:
(a) prohibit or restrain the transactions contemplated hereby or make
such transactions illegal; or
(b) cause the assignment and transfer of any of the Permits to any
person other than Buyer; or
(c) block the assignment to Buyer of U.S. Fuel's Mining Permit.
8.2 Suits.
No suit or other proceeding shall be pending or threatened before any court or
governmental agency seeking to restrain, prohibit or declare illegal the transactions
contemplated hereby.
8.3 Representations are True.
All representations of each of the parties contained in Article 6 of this Agreement
shall be true in all material respects at and as of the date of completion of the transaction
as if such representations were made at and as of such date, and each of the parties shall
have performed and satisfied all acts and agreements required by this Agreement to be
performed and satisfied by each of them at or prior thereto.
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8.4 DOGM and OSM Actions.
The approval by DOGM and, if necessary, the United States Office of Surface
Mining Reclamation and Enforcement (nOSMn), of: (i) the transfer of the Mining Permit
from U.S. Fuel to Buyer; (ij) the release by DOGM of U.S. Fuel's bonds securing
performance of reclamation under the Mining Permit; and (iii) the release by DOGM of U.S.
Fuel from all further reclamation obligations under the Mining Permit transferred to Buyer.
ARTICLE 9: COMPLETION OF TRANSACTION
9.1 Date, Time and Place.
Unless otherwise agreed in writing by the parties, the completion of the transaction
shall take place at 10:00 a.m., prevailing local time, on or before the Completion of
Transaction Date at the offices of Pruitt, Gushee & Bachtell, 1850 Beneficial Life Tower,
Salt Lake City, Utah 84111, or such other date and/or place to which the parties may
agree.
9.2 Transaction Completion.
(a) At the designated date, time and place, the following shall occur:
(i) U.S. Fuel shall execute, acknowledge and deliver to Buyer an
assignment of the Other Permits in the form attached as Exhibit B-3 and
such other instruments of conveyance, assignment and transfer reasonably
necessary to convey U.S. Fuel's right, title and interest in and to the Other
Permits to Buyer. Nothing in this Agreement shall be construed as an
attempt to assign any assets or rights which are nonassignable or which are
assignable only with the consent of another person and/or government
agency (unless and until such consent shall have been obtained), nor shall
U.S. Fuel have any liability or obligation to obtain such consents, but U.S.
Fuel agrees to cooperate as Buyer seeks such consents.
(ii) Buyer shall deliver to U.S. Fuel the duly authorized and
executed copies of all documents and agreements required of it as provided
under this Agreement.
(b) Buyer shall pay (at its own expense) any documentary, transfer, filing and
recording fees required in connection with the transaction contemplated by this
Agreement.
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ARTICLE 10: TERMINATION OF AGREEMENT
10.1 Non-Satisfaction or Non-Waiver of Conditions.
If any condition to closing described in Article 8 of this Agreement has not been
satisfied or waived prior to or at the date, time and place for completion of the transaction
this Agreement shall terminate, unless otherwise agreed in writing by the parties and the
parties shall not be required to close on that date.
10.2 Final Termination Date.
All conditions as set out in Article 8 shall be completed within six (6) months after
the date of this Agreement or this Agreement shall terminate. Each of the parties shall
have an affirmative obligation to complete all conditions in as timely a fashion as is
possible; provided, however, if such conditions cannot be completed by the date indicated
for reasons beyond the control of the parties, this Agreement may be extended for up to
three (3) additional months at the election of either party.
10.3 Default.
{a} If any of Buyer's representations hereunder prove to be untrue in any
material respect, which would prohibit or prevent the contemplated transaction or
Buyer fails to perform any of its obligations hereunder for any reason, other than
U.S. Fuel's prior default, Buyer will be deemed to be in default hereunder, and in
the absence of waiver by U.S. Fuel, this Agreement shall terminate.
(b) If any of U.S. Fuel's representations hereunder prove to be untrue in any
material respect, which would prohibit or prevent the contemplated transaction,
U.S. Fuel will be deemed to be in default hereunder and, in the absence of waiver
by Buyer, this Agreement shall terminate.
10.4 Effect of Termination.
(a) In the event of termination, this Agreement shall be of no force and
effect and neither party shall have any further obligation or liability to the other
arising under, resulting from, or attributable to this proposed transaction, this
Agreement or any of the negotiations relative hereto except as otherwise provided
in Section 5.1 (c) of this Agreement.
(b) Buyer agrees to execute and deliver to U.S. Fuel any documents
requested to cancel, annul and take any steps necessary in U.S. Fuel's sole
discretion to provide notice of termination of this Agreement and in the event of
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termination of this Agreement prior to approval of transfer of U.S. Fuel's Mining
Permit to Buyer, it is agreed that Buyer will release all rights to the Mining Permit,
withdraw any application for approval of transfer of the Mining Permit and shall
surrender the Designation of Operator by instruments satisfactory to U.S. Fuel.
ARTICLE 11: MISCELLANEOUS
11.1 Employees.
This Agreement covers the sale and assignment of a Mining Permit and Other
Permits for operations on particular real, personal and mixed property. Even though there
are currently no active underground mining operations in place, U.S. Fuel was a party to
a Bituminous Coal Wage Agreement of 1988 which was terminated effective February 2,
1993. Since February 2, 1993, U.S. Fuel's bargaining unit employees have been working
under the mandatory terms and conditions of employment from that expired 1988 Wage
Agreement, a copy of which Buyer acknowledges has been provided to Buyer. To the
extent that the sale and assignment of permits to Buyer under this Agreement constitutes
a conveyance which imposes any legal obligation upon U.S. Fuel to require Buyer to
assume any of U.S. Fuel's bargaining obligations under or related to the expired 1988
Wage Agreement, Buyer agrees to assume the same as of the Closing Date.
Nevertheless, Buyer does not assume, and U.S. Fuel expressly retains full responsibility
for the payment, performance, discharge and satisfaction of all obligations and liabilities
to any employees, former employees, disabled employees and retirees of U.S. Fuel and
its affiliated companies (collectively, the "Covered Persons") and their widows and
dependents, or to any person or entity or agency who asserts a claim derived from such
Covered Persons or their widows and dependents which arose, prior to the Closing Date,
under the expired 1988 Wage Agreement or any other law or agreement, including
without limitation the Coal Industry Retiree Health Benefit Act of 1992, and as a result of
such Covered Persons' employment relationship with U.S. Fuel or its affiliated companies,
including without limitation all severance, vacation, pension, health, profit sharing,
employee stock purchase and stock option plans, maternity leave, holiday plans or
policies, sick leave plans or policies, bonus plans, incentive, disability or group insurance
plans, deferred compensation, medical, life, dental and welfare, worker's compensation
and/or occupational disease obligations and liabilities, and any other related employee
benefit obligation. In addition, Buyer does not assume, and U.S. Fuel expressly retains,
11

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full responsibility for the payment, performance, discharge, and satisfaction of all
obligations and liabilities to the Covered Persons and their widows and dependents, which
arise after the Closing Date, under any existing or newly enacted law and as a result of
their employment relationship with U.S. Fuel or its affiliated companies.
11.2 Assignment.

Neither party shall assign this Agreement without the written consent of the other.

11.3 Publication.
Prior to the completion of the transaction, Buyer and U.S. Fuel agree to keep the
terms of this Agreement confidential, except that nothing shall prevent U.S. Fuel or Buyer
from disclosing these terms to (i) their respective employees, officers and directors,
(ij) employees, officers and directors of affiliated companies, (iii) their attorneys or
accountants, (iv) their engineers and consultants, provided that in each case such parties
are advised of the confidential nature of the information or (v) a governmental agency or
to the public which the disclosing party believes in good faith is required by pertinent law
or regulation or the rules of any stock exchange. After the Completion of Transaction,
Buyer, U.S. Fuel and their affiliated companies shall be permitted to make such public
disclosures relating to the sale and assignment as they deem advisable.
11.4 Governing Law.

This Agreement shall be governed by the laws of Utah.

11 . 5 Exhibits.
Exhibits are hereby incorporated herein by reference as if set out fully at length
within this Agreement and all references in this Agreement to exhibits shall be deemed to
be references to such exhibits as the same may be amended and supplemented, in either
case with the consent of both parties, through and as of the date of Closing.
11.6 Captions.
The headings herein are forthe convenience of reference only and shall not modify,
define, expand or limit any of the terms or provisions hereof.
11.7 Notices.
All communications required or permitted under this Agreement shall be in writing
and may be served by depositing the same in the mail, addressed to the party to be
notified at the address set forth below, postage prepaid, and registered or certified, with
a return receipt requested. Notices deposited in the mail in the manner hereinabove
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(
described shall be deemed to have been received on the date of delivery as shown on the
return receipt. Written notices served in any other manner shall be deemed to have been
received if and when actually received by the addressee. Either party may, by written
notice so delivered to the other, change the address to which delivery shall thereafter be
made.
If to U.S. Fuel: United States Fuel Company
340 Hardscrabble Road
Helper, Utah 84526
Attention: President
with copy to:
Arava Natural Resources Company, Inc.
340 Hardscrabble Road
Helper, Utah 84526
Attention: President
(
If to Buyer: Hiawatha Coal Company, Inc.
3212 South State Street
Salt Lake City, UT 8411 5
Attention:E.O. Finley, President
with copy to:
Carl Kingston
3212 South State Street
Salt Lake City, UT 84115
11.8 Entire Agreement.
This instrument states the entire Agreement of the parties and supersedes all prior
agreements and understandings between the parties concerning the subject matterhereof .
This Agreement may be supplemented, altered, amended, modified or revoked only in
writing, signed by both parties.
11.9 Expenses of this Agreement.
Except as otherwise provided herein, each party shall be solely responsible for all
expenses incurred by it in connection with this transaction (including, without limitation,
fees and expenses of its own counsel and accountants) and shall not be entitled to any
reimbursement therefor from the other party hereto.
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11.10 Further Assurances.
After completion of the transaction, U.S. Fuel shall, upon request of Buyer,
execute, acknowledge and deliver such further instruments of conveyance, assignment
and transfer, and take such other action as Buyer may reasonably request, in order more
effectively to convey, assign, transfer and deliver U.S. Fuel's right, title and interest to the
Mining Permits and Other Permits as contemplated in the consummation of the transaction
under this Agreement.
11 .11 Survival.
It is understood and agreed that certain specified rights and obligations of the
parties as set forth in this Agreement shall survive the completion of the transaction and
will not be merged into the instruments of conveyance or other documents executed and
delivered pursuant hereto.
11 .12 Severability.
If any provision hereof is invalid or unenforceable, then, to the extent permitted by
law, the other provisions hereof shall remain in full force and effect and shall be liberally
construed in order to carry out the intentions of the parties as nearly as may be possible.
To the extent permitted by law, the parties hereby waive the application of any provision
of law that would otherwise render any provision hereof wholly or partially invalid, illegal
or unenforceable in any respect.
11.13 Successors and Assigns.
This Agreement may be signed in counterpart and shall be binding upon and shall
inure to the benefit of the parties and their respective successors and assigns. Nothing
herein, expressed or implied, is intended to confer or confers upon any other person any
benefits, rights or remedies.
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EXECUTED the day and year first set forth above.
UNITED STATES FUEL COMPANY
Buyer
HIAWATHA COAL COMPANY, INC.
By: L~t9. ~4
E.O. Finley, Pr~ent
Section 6.3 of this Agreement is hereby ratified and confirmed as of the day and year first
set forth above.
ARAVA NATURAL RESOURCES
COMPANY, INC.
0395.92
0395\92\forms\agreemnt.fnl
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Attached to and made part of

AGREEMENT between

UNITED STATES FUEL COMPANY

and

HIAWATHA COAL COMPANY! INC.

dated JUNE 20! 1997

EXHIBIT B-1
ASSIGNMENT OF PERMIT
(Number ACT/007/001)
UNITED STATES FUEL COMPANY! a Nevada corporation, (herein referred to as
"U.S. Fuel") in consideration of the sum of TEN DOLLARS ($10.00) and other good and
valuable consideration, the receipt and sufficiency whereof is hereby acknowledged,
hereby transfers and assigns to _____________________
whose address is -------------------' ------------­
____________________, (herein referred to as "Assignee"), that certain
renewed Mining Permit Number ACT/007/011 dated March 14! 1997 from the State of
Utah! by the Utah Division of Oil, Gas and Mining (DOGM), to U.S. Fuel for the Hiawatha
Mines Complex.
IN WITNESS WHEREOF! U.S. Fuel has caused this Assignment to be executed by
a duly authorized officer this day of _______________
UNITED STATES FUEL COMPANY
By:__________________________
Michael P. Watson! President
STATE OF UTAH
ss.
COUNTY OF _______,
The foregoing instrument was acknowledged before me this ___ day of
___________, by Michael P. Watson! President of UNITED STATES FUEL
COMPANY, a Nevada corporation! by authority of a resolution of the Board of Directors
of said corporation.
NOTARY PUBLIC

My Commission Expires: ______

0395\92\forms\exhb~1 .agm
0395.92
(
Attached to and made part of

AGREEMENT between

UNITED STATES FUEL COMPANY

and

HIAWATHA COAL COMPANY, INC.

dated June 20, 1997

EXHIBIT B-2
DESIGNATION OF OPERATOR
The undersigned is, on the records of the Utah Division of Oil, Gas and Mining
("DOGM"), holder of Mining Permit Number ACT/007/011 ("Permit") and hereby
designates___________________________________________________________
______________, as its operator and local agent, with full authority
( to act in its behalf in complying with the terms of the Permit and regulations applicable
thereto and on whom DOGM may serve written or oral instructions, with copies to the
undersigned, in securing compliance with the applicable regulations with respect to
the lands subject to the Permit.
It is understood that this Designation of Operator does not relieve the
undersigned of responsibility for compliance with the terms of the Permit and the
applicable regulations. It is a[so understood that this Designation of Operator does not
constitute an assignment of any interest in the lands.
In case of default on the part of the designated operator, the undersigned will
promptly comply with all applicable regulations and orders of DOGM.
The undersigned agrees promptly to notify DOGM of any change in the
Designated Operator.
UNITED STATES FUEL COMPANY
Date'.___________________________
340 Hardscrabble Road
Helperf UT 84526
0395<92
0395\92\!orms\exhb·2<agm
I