Document:

QuickLinks
 -- Click here to rapidly navigate through this document

 

 
 

Exhibit 10.7    
    

	 	 	United States Department of the Interior

Bureau of Land Management

Wyoming State Office

  

Coal Lease Readjustment	 	        Serial Number

        WYW23929

        Date Lease Issued

        February 1, 1971

PART I: LEASE RIGHTS GRANTED  

This
lease, entered into by and between the United States of America, hereinafter called the lessor, through the Bureau of Land Management, and (Name and
Address)

Caballo
Rojo, Inc.

P.O. Box 1449

Gillette, Wyoming 82717 

hereinafter
called the lessee, is readjusted, effective (Date) February 1, 2001, for a period of 10 years and for so long thereafter as
coal is produced in commercial quantities from the leased lands, subject to readjustment of lease terms at the end of each 10-year period. 

Sec.
1. This lease readjustment is subject to the terms and provisions of the: 

	ý
	Mineral
Lands Leasing Act of 1920, Act of February 25, 1920, as amended, 41 Stat. 437, 30 U.S.C. 181-287, hereinafter
referred to as the Act;

	o
	Mineral
Leasing Act for Acquired Lands, Act of August 7, 1947, 61 Stat. 913, 30 U.S.C. 351-359; 

and to the regulations and formal orders of the Secretary of the Interior which are now or hereafter in force, when not inconsistent with the express and specific provisions
herein. 

Sec.
2. Lessor, in consideration of any rents and royalties to be paid, and the conditions and covenants to be observed as herein set forth, hereby grants to lessee the exclusive right and privilege
to drill for, mine, extract, remove or otherwise process and dispose of the coal deposits in, upon, or under the following described lands: 

	T. 47 N., R. 71 W., 6th P.M., Campbell County, Wyoming
	 	Sec. 2:	 	Lot 7 excluding the N 300' of the NW4 of Lot 7 (approximately 35.61 acres), and Lots 10, 11, 13, and 14;
	 	Sec. 3:	 	Lots 9-12 excluding the N 300' of Lots 9-12 (approximately 123.76 acres), and Lots 13-20;
	 	Sec. 4:	 	Lots 9-20;
	 	Sec. 5:	 	Lots 10-13, 18 and 19;
	 	Sec. 8:	 	Lots 1, 2, 7-10, 14 and 15;
	 	Sec. 9:	 	Lots 1-16 (All);
	 	Sec. 10:	 	Lots 1-16 (All);
	 	Sec. 11:	 	Lots 1-15;
	 	Sec. 12:	 	Lots 2-11

containing
4,028.56 acres, more or less, together with the right to construct such works, buildings, plants, structures, equipment and appliances and the right to use such on-lease
rights-of-way which may be necessary and convenient to the exercise of the rights and privileges granted, subject to the conditions herein provided. 

PART II: TERMS AND CONDITIONS  

Sec
1. (a) RENTAL RATE - Lessee shall pay lessor rental annually and in advance for each acre or fraction thereof during the continuance of the lease at the rate of $3.00 for each lease
year. 

 

(b)  RENTAL
CREDITS - Rental shall not be credited against either production or advance royalties for any year. 

Sec.
2 (a) PRODUCTION ROYALTIES - The royalty shall be 121/2 per cent of the value of the coal produced by strip or auger methods and 8 per cent of the value
of the coal produced by underground mining methods. The value of the coal shall be determined as set forth in 43 CFR 3480. Royalties are due to lessor the final day of the month succeeding the
calendar month in which the royalty obligation accrues. 

(b)  ADVANCE
ROYALTIES - Upon request by lessee, the authorized officer may accept, for a total of not more than 10 years, the payment of advance royalties in lieu of
continued operation, consistent with the regulations. The advance royalty shall be based on a percent of the value of a minimum number of tons determined in the manner established by the advance
royalty regulations in effect at the time the lessee requests approval to pay advance royalties in lieu of continued operation. 

Sec.
3. BONDS - Lessee shall maintain in the proper office a lease bond in the amount of $1,731,000.00. The authorized officer may require an increase in this amount when additional coverage is
determined appropriate. 

Sec.
4. DILIGENCE - This lease is subject to the conditions of diligent development and continued operation, except that these conditions are excused when operations under the lease are
interrupted by strikes, the elements, or casualties not attributable to the lessee. The lessor, in the public interest, may suspend the condition of continued operation upon payment of advance
royalties in accordance with the regulations in existence at the time of the suspension. Lessee's failure to produce coal in commercial quantities at the end of the 10 years shall terminate the
lease. If not submitted already, lessee shall submit an operation and reclamation plan pursuant to Section 7 of the Act no later than 3 years after the effective date of this lease
readjustment. 

The
lessor reserves the power to assent to or order the suspension of the terms and conditions of this lease in accordance with, inter alia,
Section 39 of the Mineral Leasing Act, 30 U.S.C. 209. 

Sec.
5. LOGICAL MINING UNIT (LMU) - Either upon approval by the lessor of the lessee's application or at the direction of the lessor, this lease shall become an LMU or part of an LMU, subject
to the provisions set forth in the regulations. 

The
stipulations established in an LMU approval in effect at the time of LMU approval will supersede the relevant inconsistent terms of this lease so long as the lease remains committed to the LMU. If
the LMU of which this lease is a part is dissolved, the lease shall then be subject to the lease terms which would have been applied if the lease had not been included in an LMU. 

Sec.
6. DOCUMENTS, EVIDENCE AND INSPECTION - At such times and in such form as lessor may prescribe, lessee shall furnish detailed statements showing the amounts and quality of all products
removed and sold from the lease, the proceeds therefrom, and the amount used for production purposes or unavoidably lost. 

Lessee
shall keep open at all reasonable times for the inspection of any duly authorized officer of lessor, the leased premises and all surface and underground improvements, works, machinery, ore
stockpits, equipment, and all books, accounts, maps, and records relative to operations, surveys, or investigations on or under the leased lands. 

Lessee
shall allow lessor access to and copying of documents reasonably necessary to verify lessee compliance with terms and conditions of the lease. 

While
this lease remains in effect, information obtained under this section shall be closed to inspection by the public in accordance with the Freedom of Information Act (5 U.S.C. 552). 

2

 

Sec.
7. DAMAGE TO PROPERTY AND CONDUCT OF OPERATIONS - Lessee shall comply at its own expense with all reasonable orders of the Secretary, respecting diligent operations, prevention of waste,
and protection of other resources. 

Lessee
shall not conduct exploration operations, other than casual use, without an approved exploration plan. All exploration plans prior to the commencement of mining operations within an approved
mining permit area shall be submitted to the authorized officer. 

Lessee
shall carry on all operations in accordance with approved methods and practices as provided in the operating regulations, having due regard for the prevention of injury to life, health, or
property, and prevention of waste, damage, or degradation to any land, air, water, cultural, biological, visual, and other resources, including mineral deposits and formations of mineral deposits not
leased hereunder, and to other land uses or users. Lessee shall take measures deemed necessary by lessor to accomplish the intent of this lease term. Such measures may include, but are not limited to,
modification to proposed siting or design of facilities, timing of operations and specification of interim and final reclamation procedures. Lessor reserves to itself the right to lease, sell or
otherwise dispose of the surface or other mineral deposits in the lands and the right to continue existing uses and to authorize future uses upon or in the leased lands, including issuing leases for
mineral deposits not covered hereunder, and approving easements or rights-of-way. Lessor shall condition such uses to prevent unnecessary or unreasonable interference with
rights of lessee as may be consistent with concepts of multiple use and multiple mineral development. 

Sec.
8. PROTECTION OF DIVERSE INTERESTS, AND EQUAL OPPORTUNITY - Lessee shall: pay when due all taxes legally assessed and levied under the laws of the State or the United States; accord all
employees complete freedom of purchase; pay all wages at least twice each month in lawful money of the United States; maintain a safe working environment in accordance with standard industry
practices; restrict the workday to not more than 8 hours in any one day for underground workers except in emergencies; and take measures necessary to protect the health and safety of the
public. No person under the age of 16 years shall be employed in any mine below the surface. To the extent that laws of the State in which the lands are situated are more restrictive than the
provisions in the paragraph, then the State laws apply. 

Lessee
will comply with all provisions of Executive Order No. 11246 of September 24,1965, as amended, and the rules, regulations, and relevant orders of the Secretary of Labor. Neither
lessee nor lessee's subcontractors shall maintain segregated facilities. 

Sec.
9. (a) TRANSFERS 

	ý
	This
lease may be transferred in whole or in part to any person, association or corporation qualified to hold such lease interest.

	o
	This
lease may be transferred in whole or in part to another public body, or to a person who will mine the coal on behalf of, and for the
use of, the public body or to a person who for the limited purpose of creating a security interest in favor of a lender agrees to be obligated to mine the coal on behalf of the public body.

	o
	This
lease may only be transferred in whole or in part to another small business qualified under 13 CFR 121. 

Transfers of record title, working or royalty interest must be approved in accordance with the regulations. 

(b)  RELINQUISHMENT -
The lessee may relinquish in writing at any time all rights under this lease or any portion thereof as provided in the regulations. Upon lessor's acceptance of
the relinquishment, lessee shall be relieved of all future obligations under the lease or the relinquished portion thereof, whichever is applicable. 

3

 

Sec.
10. DELIVERY OF PREMISES, REMOVAL OF MACHINERY, EQUIPMENT, ETC. - At such time as all portions of this lease are returned to lessor, lessee shall deliver up to lessor the land leased,
underground timbering, and such other supports and structures necessary for the preservation of the mine workings on the leased premises or deposits and place all workings in condition for suspension
or abandonment. Within 180 days thereof, lessee shall remove from the premises all other structures, machinery, equipment, tools, and materials that it elects to or as required by the
authorized officer. Any such structures, machinery, equipment, tools and materials remaining on the leased lands beyond 180 days or approved extension thereof, shall become the property of the
lessor, but lessee shall either remove any or all such property or shall continue to be liable for the cost of removal and disposal in the amount actually incurred by the lessor. If the surface is
owned by third parties, lessor shall waive the requirement for removal, provided the third parties do not object to such waiver. Lessee shall, prior to the termination of bond liability or at any
other time when required and in accordance with all applicable laws and regulations reclaim all lands the surface of which has been disturbed, dispose of all debris or solid waste, repair the offsite
and onsite damage caused by lessee's activity or activities incidental thereto, and reclaim access roads or trails. 

Sec.
11. PROCEEDINGS IN CASE OF DEFAULT - If lessee fails to comply with applicable laws, existing regulations, or the terms, conditions and stipulations of this lease, and the noncompliance
continues for 30 days after written notice thereof, this lease shall be subject to cancellation by the lessor only by judicial proceedings. This provision shall not be construed to prevent the
exercise by lessor of any other legal and equitable remedy, including waiver of the default. Any such remedy or waiver shall not prevent later cancellation for the same default occurring at any other
time. 

Sec.
12. HEIRS AND SUCCESSORS-IN-INTEREST - Each obligation of this lease shall extend to and be binding upon, and every benefit hereof shall inure to, the heirs,
executors, administrators, successors, or assigns of the respective parties hereto. 

Sec.
13. INDEMNIFICATION - Lessee shall indemnify and hold harmless the United States from any and all claims arising out of the lessee's activities and operations under this lease. 

Sec.
14. SPECIAL STATUTES - This lease is subject to the Federal Water Pollution Control Act (33 U.S.C. 1151-1175), the Clean Air Act (42 U.S.C. 1857 et. seq.). and to all other
applicable laws pertaining to exploration activities, mining operations and reclamation, including the Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1201 et. seq.). 

SEC.
15. SPECIAL STIPULATIONS - In addition to observing the general obligations and standards of performance set out in the current regulations, the lessee shall comply with and be bound by
the following special stipulations. These stipulations are also imposed upon the lessee's agents and employees. The failure or refusal of any of these persons to comply with these stipulations shall
be deemed a failure of the lessee to comply with the terms of the lease. The lessee shall require his agents, contractors and subcontractors involved in activities concerning this lease to include
these stipulations in the contracts between and among them. These stipulations may be revised or amended, in writing, by the mutual consent of the lessor and the lessee at any time to adjust to
changed conditions or to correct an oversight. 

	(a)
	CULTURAL RESOURCES -
	
(1)
	Before
undertaking any activities that may disturb the surface of the leased lands, the lessee shall conduct a cultural resource intensive field inventory in a manner
specified by the authorized officer of the BLM or of the surface managing agency, if different, on portions of the mine plan area and adjacent areas, or exploration plan area, that may be adversely
affected by lease-related activities and which were not previously inventoried at such a level of intensity. The inventory shall be conducted by a qualified professional cultural resource specialist
(i.e., archeologist, historian, historical architect, as appropriate), approved by the authorized officer of the surface managing agency (BLM, if the surface is privately owned), and a report
of the inventory and 

4

 

recommendations
for protecting any cultural resources identified shall be submitted to the Assistant Director of the Western Support Center of the Office of Surface Mining, the authorized officer of
the BLM, if activities are associated with coal exploration outside an approved mining permit area (hereinafter called Authorized Officer), and the Authorized Officer of the surface managing agency,
if different. The lessee shall undertake measures, in accordance with instructions from the Assistant Director, or Authorized Officer, to protect cultural resources on the leased lands. The lessee
shall not commence the surface disturbing activities until permission to proceed is given by the Assistant Director or authorized officer. 

(2)  The
lessee shall protect all cultural resource properties within the lease area from lease-related activities until the cultural resource mitigation measures can be implemented as
part of an approved mining and reclamation or exploration plan. 

(3)  The
cost of conducting the inventory, preparing reports, and carrying out mitigation measures shall be borne by the lessee. 

(4)  If
cultural resources are discovered during operations under this lease, the lessee shall immediately bring them to the attention of the Assistant Director or Authorized Officer, or
the Authorized Officer of the surface managing agency, if the Assistant Director is not available. The lessee shall not disturb such resources except as may be subsequently authorized by the Assistant
Director or Authorized Officer. 

	COAL RENEWAL	 	KNOWN	 	 
	

 	
 	

LEASE NO.	
 	

0-26936 A
	
 	

 
	 	 	EFFECTIVE DATE	 	April 2, 1995
	 	 
	 	 	EXPIRATION DATE	 	April 1, 2005
	 	 
	

LESSEE:	
 	

 	
 	

 	
 	

 
	

 	
 	

Caballo Rojo, Inc.

Box 3021

Gillette, WY 82717	
 	

 
	

FUND: COMMON SCHOOL	
 	

COUNTY: CAMPBELL	
 	

 

LAND
DESCRIPTION: 

640.00    ALL    16-47-71

ASSIGNMENTS:

ROYALTY:

SUBJ. TO O.R. ROY. PREV. RESERV. BY STOLZ, WAGNER & BROWN AND TIPPERARY CORPORATION. SAID 5% O.R.ROY INCLUDE THE 2¢- O.R. ROY RESERV. BY PAGE T. JENKINS. 

5

QuickLinks

Exhibit 10.7QuickLinks
 -- Click here to rapidly navigate through this document
 

 

 
 

Exhibit 10.8    
    

P.L.
#20

Amended January 6, 1998 

STATE OF WYOMING

COAL MINING LEASE 

        THIS
INDENTURE OF LEASE ENTERED INTO THIS 2nd day of April, 2005, A.D. by and between the STATE OF WYOMING, acting by and through its Board of Land Commissioners, party of the
first part, hereinafter called the lessor, and 

Cordero
Mining Co. 

party
of the second part, hereinafter called the lessee. 

        Section 1.    PURPOSES.    The lessor, in consideration of the rentals and royalties to be paid and the
covenants and agreements hereinafter contained and to be performed by the lessee, does hereby grant and lease to the lessee the exclusive right and privilege to mine, extract and remove all of the
coal deposits in or under the following described land, to wit: 

        640.00
All Section 16, Township 46N, Range 71W 6th p.m. 

consisting
of 640.00 acres, more or less, Campbell county, together with the right to construct, and maintain thereon all work, buildings, plants, waterways, roads, telegraph, telephone and power
lines, tipples, hoists or other structures necessary to the full enjoyment thereof, including the right to transport coal through the underground workings on the premises above described, subject
however, to the conditions hereinafter set forth. 

        Section 2.    TERM OF LEASE.    This lease, unless terminated at an earlier date as hereinafter provided, shall
remain in force and effect for a term of ten (10) years beginning on the 2nd day of April, 2005 and expiring on the 1st day of April, 2015. 

        Section 3.    IN CONSIDERATION OF THE FOREGOING, THE LESSEE COVENANTS AND AGREES:    

        (a)    BOND    When the lease becomes an operating lease or actual operations for the mineral are to be commenced, the
bond shall be furnished in such a reasonable amount as the Office of State Lands and Investments shall determine to be advisable in the premises. The operating bond shall preferably be a corporate
surety bond, executed by the lessee, the surety being authorized to do business in the State of Wyoming. A cash bond may be furnished on the consent of the Office of State Lands and Investments if the
lessee is unable to obtain a corporate surety bond. Form of bond will be furnished by the Office of State Lands and Investments. The State will require two executed copies of the bond, therefore as
many additional copies should be made as will be required by the lessee and the bonding company. 

        (b)    PAYMENTS    To make all payments accruing hereunder to the Office of State Lands and Investments, 122 West
25th Street, Herschler Building, Cheyenne, Wyoming 82002-0600. 

        (c)    RENTALS    Prior to the discovery of commercial quantities of coal in the lands herein leased, to pay the
lessor in advance beginning with the effective date hereof, an annual rental of ONE DOLLAR ($1.00) PER ACRE OR FRACTION THEREOF PER YEAR for the 1st through the 5th year inclusive and
TWO DOLLARS ($2.00) PER ACRE OF FRACTION THEREOF PER YEAR for the 6th through 10th years inclusive—or renewal thereof; provided, however, that if the said lands are not on a
commercial mining basis and so operated at the end of two (2) years from the date hereof, such rental may be increased at the option of the lessor, to such an amount as the lessor may decide to
be fair and equitable. 

1

 

        After
the discovery of commercial quantities of coal in the lands herein leased to pay to the lessor in advance, beginning with the first day of the lease year succeeding the lease year
in which commercial discovery was made, an annual rental of TWO DOLLARS ($2.00) PER ACRE OR FRACTION THEREOF PER YEAR unless changed by agreement, such rental so paid for any one year to be credited
on the royalty for that year. 

        Annual
rentals on all leases shall be payable in advance for the first year and each year thereafter. No Notice of Rental Due shall be sent to the lessee. If the rental is not received
in this office on or before the date it becomes due, Notice of Default will be sent to the lessee and a penalty of 50¢ per acre or fraction thereof for late payment will be assessed. 

        The
lessee is not legally obligated to pay either the rental or the penalty, but if the rental and penalty are not received in this office within thirty (30) days after the Notice
of Default has been received by the lessee, the lease will terminate automatically by operation of law. Termination of the lease shall not relieve the lessee of any obligation incurred under the lease
other than the obligation to pay rental or penalty. The lessee shall not be entitled to a credit on royalty due for any penalty paid for late payment of rental on an operating lease. 

        (d)    ROYALTY    To pay a royalty on all coal mined from the land herein leased, either in kind or value as the
lessor may elect of 121/2% on coal mined by surface mining operations and 8% on coal mined by underground mining methods. 

        Royalty
shall be payable on the gross value at the mine on all coal mined. Gross value for the purpose of royalty calculation means the unit sale or contract price times the number of
units sold. In calculating gross value the sales price shall be prima facia evidence of such gross value. No deduction shall be allowed for fees, taxes, assessments or similar levies imposed by the
State of Wyoming, its political subdivisions, any other state or the federal government, nor for the expense of mining, processing and loading the coal in merchantable condition at the mine ready for
shipment. If the coal is not sold and valued at the mine, transportation from the mine to the point of sale or delivery may be deducted in determining value. In the event there is no sale of the coal
or the Board of Land Commissioners determines that the sales price does not truly reflect the value of the coal, it may make its own determination of value and require that royalties be paid on the
basis of the value determined by the Board. 

        If
the lessor elects to take its royalty in kind, such coal shall be good merchantable coal delivered for shipment at the mine. 

        (e)    MONTHLY PAYMENTS AND STATEMENTS    Unless a different time schedule is approved by the Board of Land
Commissioners, to make payment on or before the twentieth (20th) day of the calendar month succeeding the month of production, for royalties on all coal mined from the land; and to furnish sworn
monthly statements therewith showing in tons the amount of all coal mined, accompanied by the mine weights; and such other information as may be called for by the form of report prescribed
by the lessor. These statements are to be subject to verification by examination of books and records of the lessee. 

        (f)    UNDERGROUND WORKINGS    That in the underground workings for coal all shafts, inclines and tunnels shall be
well timbered (when good mining requires timbering); that all underground timbering placed in the mine shall be kept in good condition and at no time shall such timbering be removed unless all of the
coal in the lands have been removed; that at the termination of this lease all underground timberings shall become the property of the lessor without compensation therefor to the lessee; that all
parts or workings, where the coal is not exhausted and for good reasons not being worked, will be kept free from water and waste material; and that the underground workings shall be protected against
fire and flood and should creeps and squeezes occur they shall be checked without delay; to leave such solid blocks of coal as may be 

2

 

necessary
to support the cover and protect the slopes, air-courses, manways, and hauling roads to permit the lessee to mine coal from any lands which he may own or become owner of in
adjacent sections of land; and the lessee shall have the use of the slopes, air-courses, manways and hauling roads for the purpose of mining in the adjacent sections provided the lessee
shall pay the royalty for the blocks of coal so left for support for protection, if it shall be agreed that the blocks of coal so left shall be more for the benefit of the lessee than to the State of
Wyoming, and all coal so paid for may be removed subsequently during the term of this lease without subjecting the lessee to the payment of an additional royalty therefor. 

        (g)    STRIP WORKINGS    That all strip workings shall be operated in such a manner so as to remove all coal in the
vein or veins worked; that strip mining shall be continuous across the property according to a definite plan and pattern submitted to and receiving the approval of the Office of State Lands and
Investments; that all overburden removed shall, as mining progresses, be returned to original pit and leveled, so that all the expiration or surrender of the lease or termination of mining activities
the land will approximate its previous configuration; that all roads and bridges built and necessary to mining operation on the land shall upon the expiration, forfeiture or surrender of said lease
become the property of the lessor. 

        (h)    WEIGHT - WEIGHT RECORD    That all coal mined or taken from the premises, upon being hoisted and trammed, shall
be weighed and the weight thereof together with the proper check number, entered in due form in books kept for such purpose by the lessee; and an accurate record of the weight of all coal mined from
the land shall be kept and preserved separate from the records of the coal mined from other lands. 

        The
term "ton" as herein used means a ton of two thousand (2,000) pounds of unscreened coal, unless the lessor elects to compute a ton of coal at twenty-nine cubic feet of
coal in the solid, or by the measurements of the space from which the coal is mined, deducting therefrom all space occupied by slate or other impurities, and in such case the computation shall be
final and binding upon the lessee. 

        (i)    MAPS AND REPORTS    Upon demand, to furnish the Office of State Lands and Investments with copies or
Blue-prints of all maps of underground surveys of leased lands made or authorized by the lessee, including engineer's field notes, certified by the engineer who made such survey; and to
make such other reports pertaining to the production and operation by the lessee as may be called for by the lessor. 

        As
required by W.S. 36-6-102, copies of all electrical, gamma-ray neutron, resistivity or other types of sub-surface log reports obtained
by or for lessee in conducting operations on the leased premises shall be submitted to the State Geologist within three (3) years after the completion of drilling. 

        (j)    TAXES AND WAGES - FREEDOM OF PURCHASE    To pay when due, all taxes lawfully assessed and levied under the laws
of the State of Wyoming, upon improvements, coal produced from the land hereunder or other rights, property or assets of the lessee; to accord all workmen and employees complete freedom of purchase
and to pay all wages due workmen and employees at least twice each month in the lawful money of the United States. 

        (k)    STATUTORY REQUIREMENTS AND REGULATIONS    To comply with all State statutory requirements and valid regulations
thereunder. 

        (l)    ASSIGNMENT OF LEASE - MINING AGREEMENTS    (1) Not to assign this lease or any interest herein, nor
sub-let any portion thereof, except with the consent in writing of the lessor first and obtained. 

        (2)   To
submit a signed copy of any mining agreement entered into affecting the possessory title to any of the land hereby leased for approval by the lessor. 

3

 

        (3)   All
overriding royalties to be valid must have the approval of the Board and be recorded with the lease. The Board reserves the right of disapproval of such overriding
royalties when in its opinion they become excessive and hence are detrimental to the proper development of the leased lands. 

        (m)    DELIVER PREMISES IN CASE OF FORFEITURE    To deliver the leased premises with all permanent improvements
thereon, in good order and condition in case of forfeiture of this lease; but
this shall not be construed to prevent the removal, alteration or renewal of equipment and improvements in the ordinary course of operations. 

        (n)    DILIGENCE IN DEVELOPMENT    This lease is granted with express understanding that prospecting, coal mining, and
the recovery of the valuable coal content of the above described lands shall be pursued with diligence, and if at any time the lessor has reasonable belief that the operations are not being so
conducted it shall so notify lessee in writing, and if compliance is not promptly obtained and the delinquency fully satisfied, it may then, at the end of any lease year, declare this said lease
terminated and offer the said lands to the highest and best bidder, and upon such terms as the lessor may prescribe, provided, that the herein designated lessee may have a preferential right to a new
lease on the same terms and conditions as offered in the best bid; provided, however, that if the lessee fails or refuses to exercise such right the improvements then on the property shall be disposed
of pursuant to Section 6 of this lease. 

        Section 4.    GENERAL COVENANTS.    

        (a)   The
lessee shall have the right to enter upon, occupy end enjoy such surface areas of the described tract as are necessary for the mining of coal, and the construction
of all buildings and other surface improvements incidental to the work contemplated by this lease; but the lessee shall fully protect the rights of any agricultural and grazing leases which have
heretofore or may hereafter be granted or sale contract holders by erecting cattle guards or gates and keeping closed gates in all fences in which openings are or may be made, and for protection of
stock grazing thereon to fence or close all holes, pits or open cuts in which injury might be sustained, and shall not contaminate any living water upon the land so as to make it injurious to
livestock; and, further, should the lessee or any person holding from, by or under the lessee, in any operation on said premises under this lease, destroy or injure any crop, building or other
improvements of any tenant, lessee, purchaser, or other person holding under the State, the lessee agrees to fully indemnify all such injured parties in such sum or sums as may be mutually agreed upon
by the respective parties, or as may be fixed by appraisers appointed by each party if agreement is impossible; or the Board of Land Commissioners may fix the amount of such indemnity after inspection
or hearing. 

        (b)   The
rights of the lessee hereunder are subject further to the right of any other mineral lessee, his sublessee, or operator under any other mineral lease or leases as
provided by the Rules and Regulations of the Board of Land Commissioners Governing the Leasing of Sub-surface Resources and providing for multiple development of those resources, now in
force, or renewals thereof; to enjoy the free use of so much of the surface of the said lands as are necessary and incidental to their operations thereunder; and coal mining operations shall be
conducted so as not to unduly interfere with the natural production operations, nor shall coal mining operations be conducted nearer than two hundred (200) feet from any productive oil or gas
well without consent of the oil and gas lessee; and the lessee further shall not disturb any existing road or roads now on said lands nor roads leading to or from any well or well locations without
first providing adequate and suitable roads in lieu thereof, and the lessee shall fully indemnify any such lessee for any injury or damages resulting from his operations hereunder in such amount so
fixed as above provided. 

4

 

        (c)   Such
methods of mining shall be used as shall insure the extraction of the greatest amount of the coal bed possible, and all coal mining operations on these premises
shall be subject to the supervision of the State Coal Mine Inspector or other officers as by law provided. 

        (d)   During
the proper hours and at all times during the continuance of this lease the lessor or its representatives shall be authorized to go through any of the shafts,
openings or workings on the premises and to examine, inspect and survey the same and to make extracts of all books and weigh sheets which show in any way the coal output from the land. 

        (e)   This
lease shall include only the right and privilege of coal mining, but if the lessee shall discover any vein, lode, lead or ledge or other mineralized rock in or
under said lands he shall immediately report the same to the lessor and shall then have a preferential right for a period of thirty (30) days following the date of discovery to lease said vein,
lode, lead or ledge upon such terms, conditions, and royalty as may be fairly fixed by the State Board of Land Commissioners, providing the land had not been leased prior to such time for that
specific mineral. 

        Section 5.    THE LESSOR EXPRESSLY RESERVES:    

        (a)   DISPOSITION OF SURFACE    The right to lease, grant right-of-way, sell or otherwise
dispose of the surface of the land embraced within this lease under existing laws or laws hereafter enacted, or in accordance with the Rules of the Board of Land commissioners, insofar as the surface
is not necessary for the use of the lessee in the extraction and removal of the coal therein, except where such surface rights have been sold or otherwise disposed of by the State of Wyoming. 

        (b)   MULTIPLE USE    The right to lease the lands for other minerals subject to the Rules and Regulations of the
Board of Land Commissioners providing for Leasing of Sub-surface Resources and the Multiple Use thereof. 

        Section 6.    APPRAISAL OF IMPROVEMENTS    Upon the expiration of this lease, or earlier termination thereof
pursuant to surrender or forfeiture, or if such land be leased to another other than the owner of the improvements thereon, the lessee agrees that the improvements shall be disposed of in the manner
provided by law. 

        Section 7.    FORFEITURE CLAUSE    In the event that the lessee shall have procured this lease through fraud,
misrepresentation or deceit, then and in that event this agreement, at the option of the lessor, shall cease and terminate and shall became ipso facto null and void, and all improvements upon said
land or premises under the terms of this lease shall forfeit to and become the property of the State of Wyoming. In the event that the lessee shall fail to make payments of rentals and royalties as
herein provided, or make default in the performance or observance of any of the terms, covenants and stipulations hereof, or of the general regulations promulgated by the Board of Land Commissioners
and in force on the date hereof, the lessor shall serve notice of such failure or default, either by personal service or by registered mail upon the lessee, and if such failure or default continues
for a period of thirty (30) days after the service of such notice, then and in that event the lessor may, at its option, declare a forfeiture and cancel this lease, whereupon all rights and
privileges obtained by the lessee hereunder shall terminate and cease and the lessor may re-enter and take possession of said premises or any part thereof; but these provisions shall not
be construed to prevent the exercise by the lessor of any legal or equitable remedy which the lessor might otherwise have. A waiver of any particular cause of forfeiture shall not prevent the
cancellation and forfeiture of this lease for any other cause of forfeiture, or for the same cause occurring at any other time. 

        Section 8.    RELINQUISHMENT AND SURRENDER    This lease may be relinquished and surrendered to lessor as to
all or any legal subdivision of said land as follows. 

        (a)   If
no operations have been conducted under the lease on the land to be relinquished, the lessee shall file with the Office of State Lands and Investments a written
relinquishment or 

5

 

surrender,
duly signed and either witnessed or acknowledged and stating therein that no operations have been conducted on the lands. The relinquishment so filed shall become effective on the date and
hour of receipt thereof in the office of the Office of State Lands and Investments or at some later date if such be so specified by the lessee therein. If the said relinquishment fails to state that
no operations have been conducted, the effective date of relinquishment shall be the date the relinquishment is approved by the Board of Land commissioners. 

        (b)   If
operations have been conducted under the lease on land proposed to be relinquished the lessee shall give sixty (60) days notice and shall file with the Office
of State Lands and Investments a written relinquishment or surrender duly witnessed or acknowledged and stating therein that operations have been conducted on the land. The relinquishment shall not
become effective until the land and the mines thereon shall have been placed in condition acceptable to lessor and shall have been approved by the Board Of Land Commissioners. 

        (c)   All
rentals becoming due prior to a surrender or relinquishment becoming effective shall be payable by lessee unless payment thereof shall be waived by the Board of Land
Commissioners. A relinquishment have become effective there shall be no recourse by lessee, and the lease as to the relinquished lands may not be reinstated. 

        Section 9.    HEIRS AND SUCCESSORS IN INTEREST.    It is further agreed that each obligation hereunder shall
extend to and be binding upon, and every benefit hereof shall inure to the heirs, executors, administrators, successors of or assigns of the respective parties hereto. 

Section 10.
Sovereign Immunity. The State of Wyoming and the lessor do not waive sovereign immunity by entering into this lease, and specifically retain immunity and all defenses available to
them as sovereigns pursuant to Wyoming Statute § 1-39-104 (a) and all other state laws. 

IN
WITNESS WHEREOF, this lease has been executed by lessor and lessee effective as of the day and year first above written. 

LESSOR,
STATE OF WYOMING, Acting by and through its Board of Land Commissioners and State Lands and Investment Board 

	SEAL	 	 	 
	 	 	BY:	/s/ Lynne Boomgaarden

	 	 	 	Director,

Office of State Lands and Investments

	 

	 	 	LESSEE:	/s/ A. N. H. Taylor

	CORPORATE SEAL	 	A. N. H. TAYLOR

	 	 	VP Technical Services & BIP

	

 	
 	

LEGAL REVIEW

AP

6

QuickLinks

Exhibit 10.8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}]]