Section 312IAC25-2-10. Exemption for coal extraction incidental to the extraction of other minerals; stockpiling of minerals

   (a) Coal extracted and stockpiled may be excluded from the calculation of cumulative production until the time of its sale, transfer to a related entity, or use:

(1) up to an amount equaling a twelve (12) month supply of the coal required for future sale, transfer, or use, as calculated, based upon average annual sales, transfer, and use from the mining area over the two (2) preceding years; or

(2) for a mining area where coal has been extracted for a period of less than two (2) years, up to an amount that would represent a twelve (12) month supply of the coal required for future sales, transfer, or use, as calculated, based on the average amount of coal sold, transferred, or used each month.

  (b) The following requirements shall be for the purposes of determining other minerals:

(1) The director shall disallow all or part of an operator's tonnages of stockpiled other minerals for purposes of meeting the requirements of sections 4 through 9 of this rule, this section, and sections 11 and 12 of this rule if the:

(A) operator fails to maintain adequate and verifiable records of the mining area of origin or the disposition of stockpiles; or

(B) disposition of the stockpiles indicates the lack of commercial use or market for the minerals.

(2) The director may allow an operator to utilize tonnages of stockpiled other minerals for purposes of meeting the requirements of sections 4 through 9 of this rule, this section, and sections 11 and 12 of this rule, only if both of the following are satisfied:

(A) The stockpiling is necessary to meet market conditions or is consistent with generally accepted industry practices.

(B) Except as provided in subdivision (3), the stockpiled other minerals do not exceed a twelve (12) month supply of the mineral required for future sales as approved by the director on the basis of the exemption application.

(3) The director may allow an operator to utilize tonnages of stockpiled other minerals beyond the twelve (12) month limit established in subdivision (2) if the operator can demonstrate to the director's satisfaction that the additional tonnage is required to meet future business obligations of the operator. A legally binding agreement for the future delivery of the minerals may be used to make this demonstration.

(4) The director may periodically revise the other mineral stockpile tonnage limits under the criteria established by subdivisions (2) and (3) based on additional information available to the director.

(Natural Resources Commission; 312 IAC 25-2-10; filed Jun 21, 2001, 2:53 p.m.: 24 IR 3431, eff Dec 1, 2001; readopted filed May 29, 2007, 9:51 a.m.: 20070613-IR-312070146RFA; readopted filed Sep 19, 2013, 10:12 a.m.: 20131016-IR-312130125RFA)