BLM: Trapper Mine to pay lower fees on some coal mined on federal land
March 28, 2018
CRAIG — Last week, the Bureau of Land Management announced Trapper Mine will receive a royalty rate reduction on some coal produced by the mine.
"It essentially lowers our fees that we pay to the federal government for tons that we mine on federal property," said Trapper Mining President and General Manager Michael Morriss.
Coal operators pay royalty fees to the federal government on each ton of coal they mine on federal land. The BLM sets this royalty rate at 12.5 percent for surface mines and 8 percent for underground mines, but it can be temporarily reduced when the BLM determines a mine isn't economically able to extract coal at the set rates due to unfavorable conditions.
"Our conditions over here are pretty adverse," Morriss said. "It's very deep, very costly to mine this."
Trapper will pay a reduced rate of 8 percent on 19.4 million tons of coal. The royalty rate applies to coal mined from May 2015 to present. Morriss estimated the mine would hit that 19.4 million tons around 2028, meaning the reduced rate would apply until then.
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Trapper has received royalty rate reductions in the past, most notably, after a landslide struck the mine in fall 2006.
The royalty rate reduction has no impact on the county's income from Trapper's property taxes, according to Moffat County Commissioner Ray Beck. The amount the mine pays in property tax is based on an average royalty rate determined by the state. Regardless of the royalty rate Trapper pays, the county receives property taxes based on a 9-percent rate.
Beck and the rest of the BOCC signed a letter of support for the royalty rate reduction in 2015. Beck applauded the mine's contributions to the community, both in terms of taxes and in community projects, such as building Loudy-Simpson Park. He said the rate reduction was a win-win for Trapper and the community.
"It makes Trapper more economically viable," Morriss said. "If it's a good thing for Trapper, it's good for the community.”