Section 312IAC25-2-8. Exemption for coal extraction incidental to the extraction of other minerals; requirements for exemption

   (a) Activities are exempt from the requirements of IC 14-34 only if all of the following are satisfied:

(1) The cumulative production of coal extracted from the mining area determined annually as described in this section does not exceed sixteen and two-thirds percent (16⅔%) of the total cumulative production of coal and other minerals removed during the period for purposes of bona fide sale or reasonable commercial use.

(2) Coal is produced from a geological stratum lying above or immediately below the deepest stratum from which other minerals are extracted for purposes of bona fide sale or reasonable commercial use.

(3) The cumulative revenue derived from the coal extracted from the mining area determined annually shall not exceed fifty percent (50%) of the total cumulative revenue derived from the coal and other minerals removed for purposes of bona fide sale or reasonable commercial use. If the coal extracted or the minerals removed are used by the operator or transferred to a related entity for use instead of being sold in a bona fide sale, then the fair market value of the coal or other minerals shall be calculated at the time of use or transfer and shall be considered rather than revenue.

  (b) A person seeking, or who has obtained, an exemption from the requirements of IC 14-34, shall comply with the following:

(1) Each other mineral upon which an exemption under sections 4 through 7 of this rule, this section, and sections 9 through 12 of this rule is based must be a commercially valuable mineral for which a market exists or which is mined in bona fide anticipation that a market will exist for the mineral in the reasonable foreseeable future, not to exceed twelve (12) months from the end of the current period for which cumulative production is calculated. A legally binding agreement for the future sale of other minerals is sufficient to demonstrate the standard in this subdivision.

(2) If either coal or other minerals are transferred or sold by the operator to a related entity for its use or sale, the transaction must be made for legitimate business purposes.

(Natural Resources Commission; 312 IAC 25-2-8; filed Jun 21, 2001, 2:53 p.m.: 24 IR 3430, 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)