SOLID MINERAL LEASES SALES SUMMARY SALES CONTRACTS FACILITY

SOLID MINERAL LEASES, SALES SUMMARY, SALES CONTRACTS & FACILITY DATA, HANDBOOK Christina Lynch Presented 04/20/2021 Industry Compliance Accurate Revenues & Data Professionalism & Integrity

ONRR Responsibilities § Establish and maintain leases and mines in our reference system. § Support prompt and accurate distribution of royalties. § Identify and resolve reporting and database inconsistencies. Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Agencies for Actions Federal Indian Lease Issued, Bonus & 1 st Year Rental Collected BLM BIA Subsequent Rent Collected ONRR BIA P&R Reporting ONRR Lease Modifications BLM BIA Lease Expiration BLM BIA Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Who is Responsible? § If you are a lessee on any Federal or Indian solid mineral lease, you are responsible for reporting applicable rents, royalties, and other obligations to ONRR. § If you are a lessee on any Federal solid mineral lease, you are also responsible for paying applicable rents, royalties, and other obligations to ONRR. Industry Compliance Accurate Revenues & Data Professionalism & Integrity

What needs to be Reported? § All Federal solid mineral leases or permits on public domain, acquired, and military lands regardless of which Federal agency administers the surface activities; § All solid mineral leases, permits, and contracts on Indian Tribal and allotted lands Industry Compliance Accurate Revenues & Data Professionalism & Integrity

What Forms Must You Submit? § ONRR-4430 Production and Royalty Report § ONRR-2014 Report of Sales and Royalty Remittances (special circumstances only) • Adjustments to reports previously submitted on an ONRR-2014 § Sales Summaries & Facility Data § Sales Contracts Industry Compliance Accurate Revenues & Data Professionalism & Integrity

When to Submit Forms? § Forms ONRR-2014 and ONRR-4430 are due no later than 4 P. M. MST on the due date as specified by the lease terms. § Unless your lease provides otherwise, ONRR requires monthly royalty payments and reports. § All payments and reports are due to ONRR until the leasing agency notifies ONRR that the lease is no longer active. Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Questions ? ? s n o i Quest Industry Compliance Accurate Revenues & Data Professionalism & Integrity

SALES SUMMARY AND FACILITY DATA Christina Lynch Presented 04/20/2021 Industry. Compliance Industry Accurate. Revenues & Data Accurate & Data Professionalism & Integrity

Office of Natural Resources Revenue Disclaimer: The statements or opinions expressed in all ONRR presentations and panel discussions at the Solid Minerals Reporter Training do not necessarily represent the views of ONRR or the Department of the Interior 10 Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Sales Summary Overview § Sales Summary Forms ONRR-4440 (A-F) § Facility Data § File Naming Convention § File Security § Questions 11 Industry Compliance Accurate Revenues & Data Professionalism & Integrity

30 CFR Regulation Sales Summary – Our Authority 30 CFR 1210. 202 How do I submit sales summaries? What to submit. (1) You must submit sales summaries for all coal and other solid minerals produced from Federal and Indian leases and for any remote storage site from which you sell Federal or Indian solid minerals. You do not have to submit a sales summary for those months in which you do not sell any Federal or Indian production. (2) If you sell from five or fewer remote storage sites, you must submit a sales summary for each site. If you sell from more than five remote storage sites, you may total the data from all sites and submit the summarized data as one sales summary. The details you report on the sales summary are for the same sales reported on Form ONRR-4430. 12 Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Element and Time Requirements Data element (i) Purchaser Name or Unique Identification Coal Monthly Sodium/potassium Monthly Western phosphate Monthly Metals Monthly All other leases with ad valorem royalty All other leases with no ad valorem terms royalty terms Monthly As Requested (ii) Sales Units Monthly Monthly (iii) Gross Proceeds Monthly Not Required (iv) Processing or washing costs Monthly Not Required (v) Transportation costs Monthly Not Required (vi) Name of product type sold Not Required Monthly As Requested (vii) Btu/lb Monthly Not Required Not Required (viii) Ash % Monthly Not Required Not Required (ix) Sulfur % Monthly Not Required Not Required (x) lbs SO 2 Monthly Not Required Not Required (xi) Moisture % Monthly Not Required (xii) By-product Units Not Required As Requested Monthly As Requested Not Required (xiii) P 2 O 5 % Not Required Monthly Not Required (xiv) Size Not Required As Requested Not Required (xv) Net Smelter Return data Not Required Monthly Not Required (xvi) Other Data e. g. , Royalty Calculation Worksheet As Requested Monthly As Requested. Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Sales Summary Snapshot Sales Summary – What is it? § A monthly snap-shot of sales to your purchasers. § A tool ONRR uses to confirm compliance and accurate reporting. 14 Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Sales Summary Info § § § Sales Summary – What should it include? An accounting of all your sales (Federal, Indian, State and Fee). Activity for only the month you are submitting. It should not include adjustments or revisions. If you must include adjustments, make them identifiable from current month sales. Sales from the mine and any remote storage sites. Any other considerations received. Note: Even if your sales contract does not require a quality, ONRR requires at a minimum the monthly average quality. 15 Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Detailed Sales Summary § Sales Summary – What should it include? § (Remote Sites) § If you sell from five or less remote sites, you must submit a sales summary for each site. § If you sell from six or more remote sites, you may total the data and submit a summarized sales summary. § Details you report on the sales summary are for the same sales reported on the original P&R for each sales point. 16 Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Form ONRR 4440 A-F link § Sales Summary Forms, ONRR-4440 (A-F) § Available on ONRR’s website at: https: //www. onrr. gov/Report. Pay/solids. htm § To save files as an Excel workbook download the Adobe PDF files to your computer and then “save as” Excel workbook. Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Screenshot for Sales Summary Data on Website Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Screenshot Form ONRR 4440 A Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Coal Data Elements Sales Summary – What should it include? Form ONRR-4440 A - Coal Data Elements § § § Purchaser Name or Unique Identification Sales Units Gross Proceeds Processing or Washing Costs Transportation Costs § § § Btu/lb. Ash % Sulfur % Lbs. SO 2 Moisture % Other Data (As Requested) Note: An example of Other Data we request would be for you to indicate if the total sales units reported includes coal from other mines. Industry Compliance Accurate Revenues & Data Professionalism & Integrity 20

Sales Summary Ad Valorem Sales Summary – When to Submit? (1) For leases with ad valorem royalty terms (that is, leases for which royalty is a percentage of the value of production), you must submit your sales summaries monthly at the same time you submit Form ONRR-4430. You do not have to submit a sales summary for any month in which you did not sell Federal or Indian production. (2) For leases with no ad valorem royalty terms (that is, leases in which the royalty due is not a function of the value of production, such as cents-per-ton or dollars-per-unit), you must submit monthly sales summaries only if we specifically request you to do so. 21 Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Submission email and Address § Sales Summary – How to Submit? § Submit your Sales Summary and Facility Data to ONRR’s Ruby. Mailbox at: Ruby. Mailbox@ONRR. gov § Send paper submissions to: Office of Natural Resources Revenue Reference and Reporting Management – Solid Minerals P. O. Box 25165, MS 63300 B Denver, Colorado 80225 -0165 Industry Compliance Accurate Revenues & Data Professionalism & Integrity 22

Facility Data Regulation Facility Data – Our Authority 30 CFR 1210. 204 How do I submit facility data? What to submit. (1) You must submit facility data if you operate a wash plant, refining, ore concentration, or other processing facility for any coal, sodium, potassium, metals, or other solid minerals produced from Federal or Indian leases with ad valorem royalty terms, regardless of whether the facility is located on or off the lease. (2) You do not have to submit facility data for those months in which you do not process solid minerals produced from Federal or Indian leases and do not have any such minerals in stockpile inventory. (3) You must include in your facility data all production processed in the facility from all properties, not just production from Federal and Indian leases. (4) Facility data submissions must include the following minimum information: (i) Identification of your facility; (ii) Mines served; (iii) Input quantity; (iv) Input quality or ore grade (except for coal); (v) Output quantity; and (vi) Output quality or product grades. (5) Your submitted facility data may be internally generated documents from your own records. You do not need to re-format them before submitting them to us. When to submit. You must submit your facility data monthly at the same time you submit your Form ONRR 4430. Industry Compliance Accurate Revenues & Data Professionalism & Integrity 23

Sales Summary/Facility Data § Facility Data – What is it? § Documentation of the process of converting raw production into marketable products. § A tool ONRR uses to confirm compliance and accurate reporting. 24 Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Facility Data – Who must submit? § If you operate a wash plant, refining, ore concentration, or other processing facility § And that facility processes coal, sodium, potassium, metals, or other ad valorem solid minerals mined on a Federal or Indian lease § The facility may be on or off the lease 25 Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Facility Data Requirements Facility Data – What Must it Include? All production processed in the facility, not just Federal and Indian. § § § Identification of your facility Mines Served Input Quantity § Input quality or ore grade (except coal) § Output quantity § Output quality or product grades 26 Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Coal Data Information Facility Data – What Must it Include? Coal (Mine Data) • • • Beginning inventory of raw coal Raw coal mined Raw coal transfers to wash plant Ending raw coal inventory BLM required quality information 27 Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Coal Data Information Cont. Facility Data – What Must it Include? Coal (Facility Data) § § § Beginning inventory of raw, blended, and clean coal Raw coal transfers to the wash plant Tons of raw coal washed Tons of clean coal output Tons of blended coal output § Transfers of each product to remote(s) § Sales of each product § Ending inventories for each product § BLM required coal quality 28 Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Non-Coal Information Facility Data – What Must it Include? Sodium/Potassium (Mine Data) § § § Beginning ore inventory Current month’s ore production Ore transfers to the facility Ending ore inventory BLM required quality information 29 Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Non-Coal Information Cont. Facility Data – What Must it Include? Sodium/Potassium (Facility Data) § § Beginning inventories of ore and products Ore transfers to facility(ies) Tons of ore consumed producing each product Tons of each salable product produced Industry Compliance § Transfers to other facility(ies) § Transfers of product to remote(s) § Sales of each product § Ending inventories for products § Product qualities Accurate Revenues & Data Professionalism & Integrity 30

Facility Data Requirements Facility Data – What Must it Include? Metals (Mine Data) § § § Beginning ore inventory Ore mined Ore transfers to the mill Ending ore inventories BLM required quality information 31 Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Additional Facility Data – What Must it Include? Metals (Facility Data) • • Beginning ore and concentrate inventories Ore transferred to the mill Ore processed (concentrate) Quantity of each ore concentrate produced • • • Concentrate assays (quality parameters) Concentrate sales to smelter Ending inventories for ore and each concentrate 32 Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Submission email and address for SS/FD § Facility Data – How to Submit? § Submit your Sales Summary and Facility Data to ONRR’s Ruby Mailbox at: Ruby. Mailbox@ONRR. gov § Send paper submissions to: Office of Natural Resources Revenue Reference and Reporting Management – Solid Minerals P. O. Box 25165, MS 63300 B Denver, Colorado 80225 -0165 33 Industry Compliance Accurate Revenues & Data Professionalism & Integrity

SS/FD Naming Convention File Naming Convention S 1_12345678_MA 123_012009_CO F 1_12345678_MA 123_012009_CO S – Sales Summary F – Facility Data 1 – Sales Point or Facility Identifier 12345678 – Mine Number MA 123 – Customer ID 012009 – Sales Month XX – State or Tribe Abbreviation Code Note: The State Abbreviation Code is the 2 -character U. S. Postal Service code. Contact ONRR for the Tribe Abbreviation Code applicable. 34 Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Submission of Files File Security For Electronic Submissions to Ruby. Mailbox § Attachments may be zipped or as individual files. § Submit files to the Ruby. Mailbox. 35 Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Contact Us: Christina Lynch 303 -231 -3309 Christina. Lynch@onrr. gov Michael Rausch 303 -231 -3336 Michael. Rausch@onrr. gov 36 Industry. Compliance Industry Accurate. Revenues & Data Accurate & Data Professionalism & Integrity

Sales Contracts Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Regulations § 30 CFR§ 1210. 10(c)(20) Information Collection § 30 CFR§ 1210. 203 How do I submit sales contracts? Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Responsible Parties § Who must submit? § Companies that sell coal and metals produced from Federal and Indian leases with ad valorem royalty terms § Who could be asked to submit? § Companies that sell sodium, potassium, phosphate, and other ad valorem solid minerals Industry Compliance Accurate Revenues & Data Professionalism & Integrity

What to Submit? § What to Submit § Legal documents that affect the value of the contract: § Master contracts § Agreements § Sub-contracts § Amendments § Confirmation letters § Spot coal purchases/contracts Industry Compliance Accurate Revenues & Data Professionalism & Integrity

What Not to Submit What not to Submit § Information that doesn’t allow auditors/specialists to make a connection to the P&R Report and other data § Letters of intent (if a contract was never entered into) Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Sales Contracts Due Dates § Submit by March 30 th and September 30 th of each year § Only required to submit updates § If no changes – send ONRR a letter Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Which key elements do I need? Key Elements: § § § § The source mine and substitute mines Price per ton Period covered Minimum/maximum tonnages Quality parameters Point of delivery Any allowances or adjustments Any other pertinent information that is reflective of the sales that have been made Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Why are Sales Contracts needed? § Establish selling arrangement relationships § § Price sold Sales quantity Quality Adjustments § Identify valuation issues Industry Compliance Accurate Revenues & Data Professionalism & Integrity

ONRR Contact Information § Email contracts in batch or single copy in PDF format to: § onrrrsmssalescontracts@onrr. gov § Or mail complete, dated and signed copies to: Office of Natural Resources Revenue Reference and Reporting Management Solid Minerals P. O. Box 25165 Mail Stop 63300 B Denver, CO 80225 -0165 § Email “no change” letters to the same address Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Privacy Disclosure § Are confidential and not available for public inspection § Are exempt from disclosure under FOIA Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Inquiry? Industry Compliance Accurate Revenues & Data Professionalism & Integrity

Online Solids Handbook https: //www. onrr. gov/Report. Pay/Handbooks/in dex. htm 48 Industry Compliance Accurate Revenues & Data Professionalism & Integrity