ML20149J928

Forwards Sample Surety License Condition,Recommended Wording for Irrevocable Ltr of Credit & Outline for site-specific Reclamation & Stabilization Cost Estimates,Per Discussion During 880127 Meeting

ML20149J928
Person / Time
Issue date:	02/02/1988
From:	Hawkins E NRC OFFICE OF INSPECTION & ENFORCEMENT (IE REGION IV)
To:	BGS MINING CORP.
References
NUDOCS 8802230289
Download: ML20149J928 (13)

Text

. '

DISTRIBUTION Docket file BGS POR/DCS DGS/GRK/88/01/29/0 n MBrown, RCPD. NM LLO Branch, LLWM URF0 r/f FEB 21988 l

URFO:GRK Docket No. BGS' s

BGS Mining Corporation 7004 Jefferson, N.E.

Albuquerque, New Mexico 87109

]

^

Gentlemen:

As we discussed in our meeting of January 27, 1988, there are several forms of information that make up an acceptable application.

Of particular concern to our office are the bonding arrangements.

To this end, we are supplying ycu with these documents, which we are hopeful will answer your questions relating to bonding requirements.

contains the wording that will be contained in a "surety license condition." is an example of recommended wording for an irrevocable letter of credit. discusses site reclamation and stabilization cost estimating procedures.

Please note that the latter enclosure discusses several costing areas which are related to mills rather than in situ operations, We hope that these materials will be useful in arriving at a meaningful i

l surety arrangement.

Should you have further questions about this issue or other licensing requirements, please feel free to call myself or Gary Konwin9ki of my staf f.

Sincerely, Isl Edward F. Hawkins, Chief Licensing Branch 1 l

Uranium Recovery Field Office l

Region IV

Enclosures:

As stated

/

... l.@.

. !...N b!......

khG hk NAME :G.Konwinski/..lh EHawkins $

/:

DATE :88/01/29 I

i 1

j l

i In-situ Licensees The licensee shall maintain an NRC-approved financial surety arrangement, l

consistent with'10 CFR 40, Appendix A, Criterion 9, adequate to cover the estimated costs', if accomplished by a third party, for above ground 1

i decommissioning and decontamination, the cost of offsite disposal of radioactive solid process or evaporation pond residues, and ground water t

restoration as warranted.

The surety shall also include the costs associated with all soil and water sampling analyses necessary to confirm the accomplishment of decontamination. Within three (3) months of NRC approval of a revised decommissioning plan and cost estimate, the licensee shall submit, for NRC review and approval, a proposed revision to the financial surety arrangement if estimated costs in the newly approved decommissioning plan exceed the amount covered in the existing financial surety.

The revised surety shall then be in effect within i

three (3) months of written NRC approval.

In the case of annual updates required by 10 CFR 40, Appendix A, Criterion 9, the proposed revision shall be provided annually to the NRC at least three (3) months prior to the anniversary of the effective date of the approved surety instrument.

Financial surety coverage for the full amount of the NRC approved l

)

decommissioning cost estimate shall not lapse for any time period prior I

to license termination.

Along with each proposed revision or annual i

update, the licensee shall submit supporting documentation showing a breakdown of the costs and the basis for the cost estimates with j

adjustments for inflation, changes in engineering plans, activities l

performed and any other conditions affecting estimated costs for above

]

ground decommissioning and decontamination, the cost of offsite disposal i

of radioactive solid process or evaporation pond residues, sampling i

analyses and ground water restoration as warranted.

5 Where the licensee has been authorized by the NRC to secure a surety l

arrangement with the State, the licensee shall submit to the NRC, all

{

supporting cost estimates, the basis for the estimates and surety related l

j correspondence provided to the State, a copy of the State's surety review l

and the final approved surety arrangement.

The licensee must also ensure i

that the surety with the State expressly identifies and covers the above j

j ground decommissioning and decontamination, the cost of offsite disposal.

soil and water sample analyses and ground water restoration associated i

j with the site.

This estimate and the corresponding surety must be i

adjusted annually for inflation, changes in engineering plans, activities l

}

performed and any other conditions affecting the estimated cost.

The j

basis for the cost estimate is the NRC approved reclamation plan or the l

NRC approved revisions to the plan.

Reductions in the decommissioning 4

estimate based on work accomplished or changes to the plan shall not be i

i made without prior NRC approval.

i i

i

=. --

= _ -. _

]

1 I

i 1

)

l 2

?

r

.t

\\

outlines the minimum considerations used by the NRC in the

[

l review of decommissioning and reclamation estimates.

Reclamation plans

]

and annual upda,tes should follow this outline.

i 3

i

\\

f i

1 i

l a

a I

1 I

a 0

1 1

1

'l l

f r

r a

t 3

I t

i I

r I

e I

l l

1 l

i i

e l

I

]

I i

t i

I i

}

h i

i

• . q. ?

\\

,'j ii.

REC 0 MENDED WR0!M TOR IRREVOCAELE LETTER OF CRE0!T I

United States Nuclear Regulatory Cormission Washington. 0.C.,

20555 j

Dear Sir or Madas:

We hereby establish our Irrevocable Standby Letter of Credit No.

in your favor, at the request and for the account of (Itcensee's name and j

aMress) up to the aggregate amount of (in words) U.S. dollars 5 i

available upon presentation of 1

(1) your sight draft, bearing reference to this letter of credit i

No.

, and j

(2) your signed statement reading as follows: I certify that that the l

amount of the draft is payable pursuant to regulations issued under

)

authority of the Urantum Mfil Tallings Radiation Control Act of 1978.

s i

This letter of credit is effective as of (date) and shall expire on (date at l

least one year later), but sur.h espiration date shall be automatically extended

)

for a period of (at least one year) on (date) and on each successive empf ration date, unless, at least 120 days before the current empf ration date, f

we notify both you and (licensee's name), as shown on the signed return l

j receipts.

i 1

l l

The bank shall give famediate nottee to the licensee and the United States l

Nuclear Regulatory Commission of: (a) any notice received or action filed I

alleging the insolvency or bankruptcy of the bank; or (b) alleging any l

)

violattuns of regulatory requirements which could result in suspenston or

)

revocation of the bank's charter or Itcense to do business; or (c) the

]

bank, for any reason, becomes unable to fulfill its obitgation under the letter of credit.

j Vhenever this letter of credit is drawn on under and in compliance with the terms of this credit, we shall duly honor such draf t upon presentation to us, 7

and we shall depostt the amount of the draf t directly into the standby trust l

fund of [ licensee's name) in accordance with your instructions.

1 i

l l

I i

l t

2 L

l Each draf t must. bear upon its f ace the clause "Orawn under Letter of Credit j

No.

,, dated _

, and the total of this draf t and all other draf ts previously drawn under this Letter of Credit does not exceed (fill in amount)

I l

[ Signatures (s)andtitle(s)ofofficial(s)oftssuinginstitution) (date]

This credit is subject to [ insert "the most recent edition of the Uniform Custos.s and Practice for Documentary Credits, published by the International I

i, Charter of Comerce," or the "Uniforn Cemercial Code").

i I

i i

f i

i I

j l

l i

I l

i l

RECOMMENDED OUTLINE FOR SITE SPECIFIC RECLAMATION AND STABIl!ZATION COST ESTIMATES As required under Criteria 9 and 10 of 10 CFR Part 40, Appendix A, the licensee shall. supply sufficient information for NRC to verify that the amount of coverage provided by the financial assurance accounts for all necessary activities required under the license to allow the license to be terminated.

Cost estimates for the following activities (where applicable) should be submitted to NRC with the initial license application or reclamation plan and updated annually as specified in the license.

Cost estimates must be calculated on the basis of completion of all activities by a third party.

Unit costs, calculations, references, assumptions on equipment and operator efficiencies, etc., must be provided.

Detailed Cost Information Breakdown for Hills and In-Situ Facilities The detailed cost information necessary to verify the cost estimates for the above categories of closure work is described 17 the following outline.

l I.

FACILITY DECOMMISSIONING Mill Site Oecomissioning. - Olsmantling, decontamination and/or disposal of all structures and equipment. - Excavation and burial of contaminated earth (in vicinity of mill site, ore storage area, access roads around the perimeter of the tailings disposal site, evaporation pond residues, etc;) - Reclamation of disturbed areas from the above clean up activities.

In Situ Facility Occomissioning - This includes dismantling, decontamination and disposal of all structures and equipment.

This may be accomplished in two phases.

In the first phase, only the equipment not used for ground-water restoration is removed.

The remaining equipment would be removed in a second phase, when ground water restoration and well plugging is complete.

The buildings used for the in situ operations may be decontaminated and i

released for unrestricted use.

A.

Salvageable building and equipment decontamination (list).

For each building or pieces of equipmen} listed, the following data should be provided.

1.

Labor for dismantling and decontamination a.

Person-hours and categories of labor b.

Averagehourlywage,foreachcategory

i l

l 2

c.

Total labor cost (benefits, insurance, etc., and all labor overhead must be included here or calculated on i

the basis of total project labor)

[

2.

Equipment an6 material for dismantling and decontamination a.

Itemization of equipment and material to be used for decontamination j

b.

Itemized cost for material and equipment cost per hour listed in (a) above (equipment costs must include hourly operating, ownership and overhead expenses) c.

Operating hours for each piece of equipment d.

Total equipment and material cost 8.

Non-salvageable building and equipment disposal i

1.

List of major categories of building and equipment to be I

disposed of and their corresponding quantities t

1 a.

Structures (list each major) (tons of material and building volume cubic feet) l b.

Foundation concrete (cubic yards)

L c.

Process Equipment (tons)

I d.

Piping & Insulation (lump sum) e.

Electrical & Instrumentation (lump sum) 1 2.

Unit cost of disposal for each item above (include equipment, labor, material, transportation, and disposal

[

costs) 3.

List and state how each chemical solution within the mill I

area will be disposed of along with the associated cost of disposal 4.

Total cost l

C.

Restoration of contaminated areas (ore storage pad, access 3

roads, process arep, affected ground water, evaporation pond residues,etc.).

s I

[

t i

l l

1 i

i i

i 3

I j

Removal and Disposal of Evaporation Pond and Residues - These j

materials should be transported to a licensed tailings area or licensed disposal site. The quantity of material to be removed and the distance to the disposal site and the fees charged by the receiving facility are important considerations in determining the costs of disposal.

i Reclamation - This entails recontouring the well fields and

{

evaporation ponds and placing top soil or other materials acceptable to NRC. This may also include revegetation.

i 1.

Removal

]

a.

Area, depth and quantity of material to be removed I

(area, feet and cubic yard--or size of liner if appropriate) j l

b.

Unit cost (include excavation, loading, transportation and deposition) c.

Total cost (equipment and labor)

I i

2.

Revegetation j

a.

Area to be revegetated (acre) i j

b.

Unit cost (include fill material replacing topsoil, and revegetation cost) l Total cost (equipment, labor and materials) c.

II.

GROUNO-WATER RESTORATION AND WELL PLUGGING I

1 q

i Mill Site Ground-Water Restoration - A major concern in the termination of a mill license is the restoration of aquifers that j

i have been contaminated by the operation of a tailings impoundment, i

I As this concern is added to the site specific reclamation plans, the licensee should include these costs in their surety until the

{

licensee is released ffon further ground water restoration

)

activities.

l l

j in Situ site Ground-Water Restoration - in most cases, ground-water j

restoration consists of ground water sweeping and water treatment j

with partial reinjection.

The water treatment equipment used during I

the uranium recovery phase of the operation is generally suitable I

for the restoration pha,se.

The capital cost of this equipment is usually absorbed during the initia) stages of the operation leaving l

l t

i l

l

?

l l

1 4

l only the costs of operation, maintenance and replacement filters for the restoration phase.

However, if additional equipment will be required for restoration, associated costs should be detailed here.

l A.'

Meth'od of restoration f

B.

Volume of aquifer required to be restored - area and thickness of aquifer -- number of required pumping cycles -- cycling time C.

Equipment associated with aquifer restoration (e.g., RO unit) l 0.

Verification sample analysis I

i 1.

number of samples I

2.

unit cost for sample collection and analysis (per sample) 3.

total cost for verification sample analysis E.

Well plugging t

L 1.

number of drill holes to be plugged 2.

depth and size of each drill hole 3.

material to be used for plugging--include acquisition, transportation, and plugging 4.

Total cost for well plugging i

F.

Total cost for ground-water restoration l

i III. INTERIM STABILIZATION OF TAILit.GS DURING THE ORYING OUT PHASE Interim Stabilization of the Tailings During Drying - Placement of soil, chemical spraying, snow fences or other control measures over dry tallings to minimize dusting or dispersal of particulates.

A.

Drying time i

B.

Area of dry exposed tailings for each year during the drying l

period (acres for years)-

(

C.

Unit cost for placement of soil, chemical spraying or other methods (Price per acre) (Include material, labor, and equipment) g i

l t

1 1

i j

I i

1 5

I D.

Cost for an enhanced evaporation system, where included in the reclamation and stabilization plan. - Capital costs, labor and operating costs I

v l

E.

Tota'l cost of interim tailings stabilization i

i l

IV.

TAILINGS IMPOUNDNENT AREA RECLAMATION i

{

Tallings Impoundment Area Rec.lamation - Earthwork necessary to j

recontour the tallings in order to prepare for cover

~

placement. - Placement of cover materials - Revegetation and/or placement of riprap. - Construction of diversion channels or other j

measures required for long-tern stability.

i A.

Area and quantity of cover material (acres, cubic yards) l j

B.

Location and size of borrow area that serves as a source of i

cover material.

(Include distance from borrow area to tailings

}

l impoundment, grade and quantity of material from each borrow area)

C.

Labor and equipment unit cost for each type of material j

(include excavation, loading, transportation, depositing.

l spreading, and ccmpacting; detailing costs and equipment types f

and calculations for each function)

)

D Estimated costs for revegetation of tallings pile, if applicable, and borrow areas (labor, equipment and materials) i E.

Estimated costs for riprap / rock armor, if applicable (labor, materials, transporation and equipment)

F.

Estimated costs for special engineered features - diversion channels, s

[

equipment) pillways, etc. (in unit costs) (labor, materials and i

1 i

]

G.

Estimated costs for a quality assurance program including field and laboratory testing to assure that the "as built" system

(

)

conforms to desigh specifications.

Indicate number and type of j

4 tests, labor and equipment costs.

l j

H.

Fencing costs (unit costs for ' labor and materials) total length l

and type of material I.

Addional control measures, if necessary (guard service, etc.)

1 j

J.

Total cost 1

i i

l, l

}

l

i I

i i

6 r

l i

t i

If the reclamation plan calls for different layers of soil, such as I

clay, etc.. Items IVA. through IVF. above should be provided for

{

each layer.

Reclamation estimates may not always have to include i

the entire project area (i.e., operations which involve phased i

reclamatibn need only include coverage for the maximum area impacted during the period of the license.)

V.

RADIOLOGICAL SURVEY AND ENVIRONMENTAL HONITORING l

Radiological Survey - Gamma surveys and soil samples, for radium in t

areas to be released for unrestricted use.

Soils around the mill l

building, tailings piles, well field evaporation ponds and process l

I buildings should be analyzed for rad um content.

A gamma survey of t

all areas should be made prior to release for unrestricted use.

All

(

equipment released for unrestricted use should be surveyed and i

records maintained.

l 4

j A.

Soil samples for radium 8.

Decommissioning equipment and building smear samples l

i C.

Gamma survey i

0.

Environmental monitoring

[

i Costs of labor, materials and analysis for continuation of l

environmental monitoring program throughout reclamation j

E.

Total cost 1.

Number of each kind sample listed above 2,

Unit cost for sample and analysis (price per sample) l J

{

3.

Total cost for radiological survey i

j VI.

PROJECT MANAGEMENT COSTS AND MISCELLANEOUS 4

i Itemize estimated costs associated with project management, engineering changes, mobilization costs, legal expenses, power costs during reclamation, qdality control radiological safety costs, etc.

j l

VII. LABOR AND EQUIPMENT OVEkHEAD, CONTRACTOR' PROFIT i

I Overhead costs for labor and equipment and contractor profit may be calculated as separate items or loaded into hourly rates.

If included in hourly rates, the unit costs must identify the

]

percentages applied for each area.

j i

4 l

i i

7 VIII. LONG-TERM SURVEILLANCE AND CONTROL (FOR HILLS ONLY) CRITERION 10 SPECIFIES A HINIMUM OF $250,000 IN 1978 DOLLARS ($407,950 IN OECUSER 1986 DOLLARS) long-ters' surveillance and control fund to cover the cost of federal government agency site inspection, monitoring, and control ceasures, if necessary.

IX.

CONTINGENCY The licensee should include a contingency amount to the total cost estimate for the final site closure.

The staff currently considers a 15% contingency to be an acceptable minimum amount.

X.

A0JUSTMENTS TO SURETY AMOUNTS The licensee is required by 10 CFR 40, Appendix A, Criteria 9 and 10 to adjust their cost estimates annually to account for inflation and changes in reclamation plans.

The submission should be in the form of a request for amendment to the license.

A.

Adjustments for inflation The licensee should submit a revised surety incorporating adjustments to the cost estimates for inflation ninety (90) days prior to each anniversary of the date on which the first reclamation plan and cost estimate was approved.

The adjustment should be made using the inflation rate indicated by the change in the Consumer Price Index published by the U.S.

Department of Labor Bureau of Labor Statistics.

B.

Changes in Plans Changes in the process such as size or rethod of operation.

Licensee initiat'ed changes in reclamation plans or reclamation /decornissioning activities performed.

Adjustments to reklamation plans required by the NRC, Proposed revisions 'to reclamation piens must be thoroughly documented and cost estimates and the basis for cost estimates detailed for NRC review and approval.

Where a licensee is authorized by the NRC to secure a surety arrangement with tlie state, no reduction to the surety amount shall be initiated without prior NRC, approval.

Copies of all correspondence relating to the, surety between the licensee and the State shall

(

t l

t 8

be provided to the NRC.

If authorized by the NRC to maintain a surety with the State as the beneficiary, it is the t

responsibility of the licensee to provide the NRC with i

verification of same, ensure that the agreement with the State specifically identifies the financial surety's application to

}

the mill facilit decommissioning /y, ISt. facility, tailings and related area j

reclamation and transfer of the long-tern surveillance and control fee to the U.S. Department of the j

Treasury prior to license termination.

f f

All costs (unit and total) are to be estimated on the basis of l

independent contractor costs (include overhead and profit in unit costs or as a percentage of total).

Equipment owned by the licensee and the availability of ifcensee staff should not be considered in

(

the estimate to reduce cost calculations.

All costs should be based

{

on current year dollars. Credit for salvage value is generally not t

acceptable on the estimated costs.

}

i The NRC staff review may include a comparison of unit cost estimates with standard construction cost guides (e.g., Dodge Guide, Data

{

Quest) and discussions with appropriate state or local authorities (highway cost construction).

The licensee should provide suppor ting information or the basis for their selection of the unit cost i

i figures used in their estimates.

l I

\\

i s

s I

e I

i

.