While each mine controls coal reserves with a mixture of federal coal and fee coal, about 90% of the production is federal. As time goes by, the fee coal will be depleted, leaving only federal coal available in the reserve base.
The North Fork Branch of the Union Pacific Railroad operates exclusively to serve these coal mines. This line branches from the main line in Grand Junction, Colorado and passes through Delta, Hotchkiss, Paonia, and Somerset, Colorado.
Federal coal leases incur an 8% royalty for underground mining operations, as well as a $3.00 per acre yearly rental fee for each lease. The resulting revenue from federal coal production royalties paid to the federal treasury is about $2.50 per ton. Half of that revenue is returned to the State of Colorado.
For more information, visit the national BLM coal webpage: http://www.blm.gov/wo/st/en/prog/energy/coal_and_non-energy.html