CB council officially objects to Arch Coal royalty reduction request

Town received $26K last year from mineral royalty

By Mark Reaman

The Crested Butte Town Council will send a letter to the Bureau of Land Management (BLM) asking the agency not to approve a royalty rate reduction request by Arch Coal on its operation at the West Elk coal mine near Paonia.

The request for the letter came from public lands director for High Country Conservation Advocates Matt Reed at the May 15 town Council meeting. Reed explained that the reduction would hurt the pocketbooks of local citizens.

“You know the climate change implications with the coal mine operations, but the royalty rate request is a real issue as well,” Reed said. “The town of Crested Butte received $26,942 from mineral leases in 2016. The RE1J school district received $49,717. So there is a direct correlation from mining operations in the county to local taxpayers. We are asking them to pay their fair share.”

Reed said Arch Coal is operating on public land and mines publicly owned coal. The company is hoping to expand into 1,700 acres of the Sunset Roadless Area, directly adjacent to the West Elk Wilderness, to access another 19 million tons of coal. Reed said Arch has been mining and paying an 8 percent royalty rate since 2015 but wants to pay only 5 percent. He said company reports indicate that the West Elk mine is among the most profitable mines Arch operates, when comparing the operating margin per ton of coal mined.

Crested Butte mayor Glenn Michel explained the town was hesitant to begin sending letters on every issue that might impact the town. But given the direct economic impact to the town and school district, he supported this request. He asked if Reed planned to go to the county, the city of Gunnison and Mt. Crested Butte for similar letters. Reed said he would pursue that avenue.

The council agreed to have the town staff draft a letter echoing Reed’s points that will be sent to the BLM.

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