Sunoco, Inc. and Subsidiaries - Page 4

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             In 1976, Cordero began mining the property for coal, and                 
             it continued mining the property until June 1993 when                    
             petitioner sold Cordero to Kennecott Coal Co. (Kennecott),               
             as described below.                                                      
                  Cordero began mining the Gillette property by making a              
             “box cut” in the ground to expose the coal seam.  The term               
             “box cut” describes the vertical and lateral removal of                  
             “overburden” to gain initial access to the coal.  The term               
             “overburden” refers to the soil and rock that overlay a                  
             coal seam.                                                               
                  After making the box cut on the Gillette property,                  
             Cordero began strip mining coal.  This type of mining                    
             involves the systematic advance removal of overburden to                 
             expose the coal seam and to permit continuous extraction                 
             of the exposed mineral.  The parties agree that the                      
             removal of overburden in this case benefited only the                    
             limited increment of the coal seam that was exposed after                
             the overburden was removed.  Following its removal, the                  
             stripped overburden was either deposited as part of                      
             reclaiming the disturbed or mined areas, or it was stored                
             for later use in reclaiming those areas.                                 

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Last modified: May 25, 2011