§1259 Performance Bonds

Summary

Before a permit is issued, the applicant must file a performance bond with the agency that oversees mining, using the agency’s form and payable to the United States or the State. The bond must cover the part of the permit area where the operator will start mining during the first permit term. More bonds must be added when the operator begins later parts of the work. The agency sets the bond amount based on the approved reclamation plan and factors like topography, geology, hydrology, and how hard it will be to revegetate. The bond must be large enough for the agency to finish reclamation if needed, and the total bond for one permit cannot be less than $10,000. The bond lasts for the time of mining and for the period the operator is responsible for revegetation under section 1265 of this title. The operator and a corporate surety licensed in the State usually sign the bond, but the operator may instead deposit cash, negotiable U.S. or State bonds, or negotiable bank certificates of deposit equal to or greater than the bond amount. The agency may accept the operator’s own bond without a separate surety if the operator proves it has a qualified agent for legal service and a strong financial history, or the Secretary may approve an alternative program that meets the same goals. Cash or securities are held on the same terms as surety bonds, and the agency can adjust bond amounts when acreage or reclamation costs change.