Surface Mining Bonds are required for both surface coal mining and non-fuel mineral surface mining and reclamation operations in Alabama. These bonds are needed after being approved for a permit but prior to receiving the permit. Jet Insurance Company provides Surface Mining Bonds as a guarantee of financial restitution to the Alabama Department of Labor and Surface Mining Commission should an operator fail to complete obligations in compliance with the permit and relevant state regulations and laws.
Whether you need a bond for surface mining of non-fuel minerals or coal, Jet will work with you to obtain the required bond.
The bond price depends on various factors including the operator’s personal credit, bond limit, financial status, company experience, type of mineral(s) being mined, estimated lifespan of mining operations, and the total ratio of mined land to total plat of land. The price you pay will only be a small percentage of the bond limit, if approved.
Those operating non-fuel mineral surface mining and reclamation operations need a bond in the amount of $2,500 per acre of land covered by the permit, pursuant to the Alabama Surface Mining Act of 1969.
For the operators of surface coal mining and reclamation operations the bond amount is an estimation of the cost associated if the Surface Mining Commission were to complete the reclamation, restoration, and abatement work per the permit terms and Surface Mining Control and Reclamation Act of 1981. The amount is based on the anticipated difficulty associated with the reclamation and factors such as topography, hydrology, geology, and revegetation potential. The bond limit may change annually, based on inspections performed of the work site. The bond limit starts at a minimum of $10,000.
Although there are two regulatory agencies for the different bond types, both agencies are tasked with protecting Alabama’s public and lands. Surface Mining Bonds are used as tools to guarantee restitution from a third party (Jet) should a person or entity be financially harmed by the actions of a surface mining and reclamation operation. The State of Alabama is not going to hand out a mining permit to anybody and utilize a surety company to do some of the vetting and put some money up (surety bond) as a guarantee.
The State of Alabama Department of Labor (also referred to as Department of Industrial Relations) regulates operators of non-fuel mineral surface mining operations. Non-fuel minerals covered under this permit and bond are clay, gravel, sand, ores, and other minerals. Minerals not included are chert, marble, limestone, dolomite, and coal.
Surface coal mining and reclamation is regulated by the State of Alabama Surface Mining Commission.
We gather only the necessary information online to get your quote process started. A credit check is completed, but it does not affect your score. Once you submit the application, Jet will review the details and let you know if any further information is needed. We may require the following: Financial statements, permit details and proof of prior mining experience.
Once an underwriter has an approved rate ready, it will be sent to you via email. After payment is received, you will receive a copy of the bond and your receipt.
The Department of Labor requests that the bond be handed in with your mining permit application. It must include signatures from the surety company (Jet) and you. Your company seal is also needed on the bond form. Send the bond and all paperwork to the address below:
State of Alabama
Department of Industrial Relations
649 Monroe Street
Montgomery, AL 36131
For those submitting the bond to the Surface Mining Commission, we can do it for you! However, if you choose to file yourself, find the address below:
State of Alabama
Surface Mining Commission
PO Box 2390
Jasper, AL 35502-2390
The Department of Labor allows cancellation of the surface mining bond for non-fuel minerals, but only with a 90-day written notice. It’s important to make sure you have completed permit requirements or have another bond on file before requesting cancellation. When ready to cancel, just email us a request to [email protected] and we will notify the Department of Labor to start the 90-day cancellation process.
The Surface Mining Commission does not allow for cancellation of the bond. The bond is only released upon the Commission’s jurisdiction once work has been completed according to the regulations.
Surface mining operators of non-fuel minerals must notify the Department of Labor upon work completion. Within 30 days, the Department will hire a registered forester to inspect the land and if reclaimed according to the requirements, the operator and surety will be released of further bond liability.
Surface Mining Bonds must be active for the duration of the surface mining and reclamation operations. Upon the bond’s expiration date, Jet will send a renewal notice for you to remit payment. At the time of renewal, if there are any changes such as a bond limit increase or decrease please let Jet know. Without an active bond or with improper bond coverage, the permit will be revoked.
Avoiding bond claims is easy as long as regulations in the Code of Alabama, 1975, Title 9, Chapter 16, are complied with and the permit is completed as agreed upon. Claims occur when an operator fails to complete requirements or otherwise lacks cooperation with their regulatory agency.
The Department of Labor and Surface Mining Commission use the bond as a last resort when surface mining operations are not completed per the regulations. Prior to the bond being utilized, both regulatory agencies may schedule a hearing with the operator and/or bring civil suit against the operator. Various disciplinary actions can be taken, including permit revocation, civil fines, and bond claims.
Even though the Department of Labor and Surface Mining Commission both go through a rigorous process for handling violations, Jet will still review all details prior to making a claim payout. That said, any valid claims will lead to a payout up to the full bond amount.
Since operators are legally obligated to follow regulations and are responsible for their actions, they must restore the bond to the full amount by paying Jet back. Failing to reimburse Jet will lead to complications completing the permitted work and future difficulties obtaining permits and bonds.