OBLIGATIONS UNDER A COAL OPERATING CONTRACT
OPERATOR
The operator under a coal operating
contract shall undertake, manage and
execute the coal operations which shall
include:
a. The examination and investigation
of lands supposed to contain coal,
by:
a.1. detailed surface geologic mapping,
a.2. core drilling,
a.3. trenching,
a.4. test pitting, and
a.5. other appropriate means
for the purpose of probing the presence of
coal deposits and the extent thereof;
b. Steps necessary to reach the coal
deposits so that they can be mined,
including but not limited to:
b.1. shaft sinking, and
b.2. tunneling; and
c. The extraction and utilization of coal
deposits.
GOVERNMENT BUREAU
The government shall oversee the The Bureau shall:
management of operation contemplated in
the coal operating contract and shall require a. On behalf of the government,
the operator to: reimburse the operator for all
operating expenses not exceeding
a. Provide all the necessary service and 90% of the gross proceeds from
technology; production in any year;
b. Provide the requisite financing; Provided, that if any year, the operating
expenses exceed 90% of the gross proceeds
c. Perform the work obligations and from production, then the unrecovered
program prescribed in the coal expenses shall be recovered from the
operating contract which shall be operation of succeeding years.
less than those prescribed in the
Decree; Operating expenses mean the total
expenditures for coal operation incurred by
d. Operate the area on behalf of the the operator as provided in a coal operating
government in accordance with contract;
good coal mining practices:
b. Pay the operator a fee, the net
d.1. using modern methods appropriate for amount of which shall not exceed
the geological conditions of the area to 40% of the balance of the income
enable maximum economic production of after deducting all operating
coal, expenses;
d.2. avoiding hazards to life, health and
property, c. Reimburse operating expenses and
d.3. avoiding pollution of air, land and pay the operator’s fee in such form
waters, and; and manner as provided for in the
d.4. pursuant to an efficient and economic coal operating contract.
program of operation;
e. Furnish the Bureau promptly with
all information, data and reports
which it may require;
f. Maintain detailed technical records
and amount of its expenditures;

g. Maintain detailed technical records

and accounts of safety demarcation
of agreement acreage and work
areas, non-interference with the
rights of the other petroleum,
mineral, and natural resources
operators;

h. Maintain all necessary equipment in

good order and allow access to these
as well as to the exploration,
development, and production sites
and operations to inspectors
authorized by the Bureau;

i. Allow representatives authorized by

the Bureau full access to their
accounts, books and records for tax
and other fiscal purposes.