Have a question? 
+1 815-826-6324 (815-8-BondAI) 
phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
Have a question? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
The reclamation bond for a non-coal surface mine in Alabama is a per acre calculation set by statute, not a negotiated figure, so a sand, gravel or clay operator can know the bond amount before the permit application is even filed. Posting a surety bond keeps your capital in the equipment and the pit instead of on deposit with the state, and the bond shrinks as acres are reclaimed and released.
Alabama requires every operator surface mining clay, sand, gravel, ores and other non-coal minerals to post a reclamation bond of $2,500 for each acre covered by the permit, payable to the State of Alabama and filed with the Alabama Department of Labor under Code of Ala. 9-16-8. The permit application carries a $250 filing fee under 9-16-5. Coal, limestone, marble, dolomite and chert mining are regulated under different laws and use different bonds.
We can help with all Alabama bonds!
Alabama runs two separate surface mining programs and operators regularly file the wrong bond form. Coal mining is regulated by the Alabama Surface Mining Commission under the Alabama Surface Mining Control and Reclamation Act of 1981. The bond on this page is the other one. It is the reclamation bond for non-fuel minerals under the Alabama Surface Mining Act of 1969, Code of Ala. 9-16-1 et seq., administered by the Alabama Department of Labor through its Surface Mining of Non-fuel Minerals program. Section 9-16-2 defines surface mining as the mining of clay, sand, gravel, ores and other minerals by removing the overburden, and it specifically excludes chert, limestone, marble, dolomite and coal. The Department describes the program as covering sand, gravel, clay and bauxite.
Code of Ala. 9-16-8 sets the penalty of the bond at $2,500 for each acre covered by the permit. There are no tiers and no negotiation. A 20 acre permit carries a $50,000 bond, a 40 acre permit carries $100,000. The bond is payable to the State of Alabama and conditioned on the operator faithfully performing every applicable requirement of the article and complying with the Department's rules. The statute allows the total penalty to be increased or reduced from time to time as land is added to or withdrawn from the permit, so an operator who expands the pit will need a rider raising the bond. Once reclamation is complete the Department has 30 days after notice to inspect the land, and if it is reclaimed properly the Department releases the operator and reduces or releases the bond.
In lieu of a surety bond the operator may deposit cash or negotiable bonds of the United States, the State of Alabama or an Alabama municipality. Most operators post a surety bond because the premium is far less than tying up $2,500 per acre in cash for the life of the permit.
Code of Ala. 9-16-4 requires a permit from the Department before any surface mining, and the bond goes with the permit. The section exempts mining for the use and benefit of the property owner, lessee, a charity or a governmental entity where the material is not for commercial sale. It exempts operations where the area of overburden removed plus the area where it is placed does not exceed one acre. It exempts operations existing on October 1, 1997 or established later that extract non-fuel minerals sold exclusively to county or municipal governments or sold by or to a public utility. It also exempts extraction incidental to landfill operation and closure, coalbed methane and oil and gas exploration, and public utility activities such as electric generation, transmission and distribution. An operator who falls outside every exemption posts the bond for every permitted acre.
The permit application under 9-16-5 carries a $250 filing fee, and the Department lists the fee as $250 per application annually. The Department must grant, require modification of, or deny the permit within 30 days and notify the applicant in writing. The Department posts a permit application and a comprehensive reclamation plan form on its program page. Confirm the current bond form and the acreage figure with the Department before the bond is issued so the penal sum matches the permit exactly.
By statute. Code of Ala. 9-16-8 fixes the penalty at $2,500 for each acre covered by the permit. Multiply your permitted acres by $2,500. The amount goes up or down as land is added to or withdrawn from the permit.
No. Coal is excluded from the Surface Mining Act of 1969 and is regulated by the Alabama Surface Mining Commission under the 1981 Act with its own bond form. This bond is for clay, sand, gravel, bauxite, ores and other non-fuel minerals regulated by the Alabama Department of Labor. Limestone, marble, dolomite and chert are also excluded from this program.
Code of Ala. 9-16-4 exempts mining for the owner's or lessee's own use and not for commercial sale, operations where the disturbed area including overburden placement does not exceed one acre, operations selling non-fuel minerals exclusively to county or municipal governments or by or to a public utility, extraction incidental to landfill operation and closure, coalbed methane and oil and gas work, and public utility activities. Everyone else needs the permit and the bond.
Yes. Section 9-16-8 lets the operator deposit cash or negotiable bonds of the United States, the State of Alabama or an Alabama municipality in lieu of a surety bond. The deposit is held for the life of the permit, which is why most operators choose a bond and pay a premium instead.
After reclamation is complete and the operator notifies the Department, the Department has 30 days to inspect the land. If it is reclaimed properly the Department releases the operator from its obligations and reduces or releases the bond. Partial releases follow the same path as individual acres are reclaimed.
The premium is a percentage of the penal sum set by the surety after reviewing the owner's credit and, for larger acreage, the company's financial statements and reclamation record. Rates differ from one applicant to the next, so the quote is the only reliable number.
This website is a referral and marketing platform that connects users with licensed insurance agents. We do not issue surety bonds directly except in states where we are licensed. All bond applications are processed and fulfilled by licensed agents. By using this site, you agree to our Terms & Conditions, Privacy Policy, and the use of cookies. If you do not agree, please exit the site.
