Bonding

Frequently Asked Questions About Reclamation Sureties and Bonding

I understand that the Division of Oil, Gas and Mining is now requiring reclamation surety for small mines and exploration. Is this true?
Yes. In the past only large mining operations have been required to post reclamation sureties, but now, by law all mining operations need to be bonded to ensure reclamation. In 2003, the Utah State Legislature amended the Utah Mined Land Reclamation Act (UCA 40-8) to require reclamation sureties on all mining operations.

The Division requires all mines and exploration projects to post reclamation surety. If your mining operation does not currently have a surety for reclamation that identifies the Division as a beneficiary, you should contact the Division in order to make arrangements to provide for reclamation surety for your site.

What if I already have a surety posted with another agency?
Even though you may have a reclamation surety with another agency, such as BLM, USFS or SITLA, you will still need to contact us to name the Division of Oil Gas and Mining as co-beneficiary and to ensure that your coverage is adequate.

How do I determine the amount of surety that I need to post?
The cost of reclamation varies from site to site and is based on 1) the technical details (or lack thereof) for reclamation found in the Notice of Intent, 2) the post-mining land use, and 3) the projected third party costs to cover Division expenses under a forfeiture circumstance. Because many small mines do not have detailed reclamation plans upon which to base an accurate cost estimate, the Division uses surety estimates based upon average dollars per acre reclamation costs. These costs are then escalated for three or five years. The costs for small mines and exploration are in a memo located here.

What forms of surety are acceptable to the Division?
The Division accepts a variety of different forms of surety and you may choose the form that is most appropriate for your situation as long as it meets the regulatory requirements. Forms acceptable to the Division include corporate surety bonds from a surety company licensed to do business in Utah, federally insured certificates of deposit, cash, irrevocable letters of credit, escrow accounts, and in some cases the Board may accept written self-bonding agreements. Ultimately, the form and the amount of the surety must be approved by the Division, so it is important that you work closely with us to make sure you have the appropriate surety in place before commencing mining operations.

Are the cost estimates for exploration different than for mines?
Since exploration notices are only valid for about a year (unless extended), surety costs are not escalated beyond the current year. The memo in https://minerals.ogm.utah.gov/includes/BoardMemo-03242021kmcpnb.pdf gives average costs for exploration projects, including surface disturbance and drill hole plugging, but please contact the Division to determine the exact amount of reclamation surety required.

How do you determine the number of acres that need to be covered by surety at any given time? Are maps required?
One difficulty that we encounter is trying to determine the actual acreage disturbed (or proposed for disturbance) at any given mine site. All too often we have inspected a small mine site only to find that it has been expanded to the point of becoming a large mine without having the appropriate approvals. In order to avoid this situation, we are also requiring in accordance with UCA 40-8-13 1(b)(iv) that you provide accurate area maps of existing and proposed operations so that it is clear what area you are responsible for reclaiming and what area the surety covers. To help you in this regard, we have developed a list of consultants who have expressed an interest in conducting this type of work. This list is only provided as a resource and there is no obligation to use any of the firms listed.

What if I reclaim an area and want to expand into another area? How does this affect my reclamation surety?
The practice of "rolling" reclamation surety monies over to another area is allowed under our program as long as the reclamation obligation on the first area has been met and that area has received a release from the Division. This release and approval of the "rollover" surety must occur prior to your disturbing a new area. This may be in the form of a partial release (for demolition, backfilling and grading) or full release (after 3 years of vegetation establishment). A form for requesting bond/site release is available on the Division's website. The rollover may not necessarily be an acre per acre trade, since it depends on the amount of reclamation completed and the amount of disturbance planned on the new area. As always, it is necessary to contact the Division to determine what surety/bond costs are appropriate for your particular site.

What is the process for submitting a cash bond?
A cash bond must be posted with U.S. funds from a bank registered to do business in the United States. Credit card payments are not allowed. The Division recommends that you submit a cashier’s check; submitting a company or personal check may result in delays until the check clears. The money must be accompanied by a properly-completed IRS form W-9 for domestic companies or form W-8 for foreign companies. The Division will reject the cash bond if it does not receive this form. The form may be submitted by hard copy or e mail (ogmminerals@utah.gov) but not by fax. The money will be deposited through the Utah State Treasurer into an account at Zions Bank where it will be held until the Division authorizes release.

Whom do I contact if I need help with the surety/bonding requirements?
If you have any questions, regarding these requirements, please contact Wayne Western, Program Manager at (801) 538-5263 or if you need assistance in completing any of the forms or in calculating appropriate surety costs contact Penny Penny Berry, Engineer Tech at (801) 538-5291.

Where can I find the forms I need to submit?
Surety forms can be found on the Minerals web site under Bonding on the FORMS page.