Notice of Competitive Coal Lease Sale, Wyoming

AGENCY:

Bureau of Land Management, Interior.

ACTION:

Notice of competitive coal lease sale.

SUMMARY:

Notice is hereby given that certain coal resources in the NARO North Tract described below in Campbell County, WY, will be offered for competitive lease by sealed bid in accordance with the provisions of the Mineral Leasing Act of 1920, as amended (30 U.S.C. 181 et seq.).

DATES:

The lease sale will be held at 10 a.m., on Tuesday, August 31, 2004. Sealed bids must be submitted on or before 4 p.m., on Monday, August 30, 2004.

ADDRESSES:

The lease sale will be held in the First Floor Conference Room (Room 107), of the Bureau of Land Management (BLM) Wyoming State Office, 5353 Yellowstone Road, P.O. Box 1828, Cheyenne, WY 82003. Sealed bids must be submitted to the Cashier, BLM Wyoming State Office, at the address given above.

FOR FURTHER INFORMATION CONTACT:

Mavis Love, Land Law Examiner, or Robert Janssen, Coal Coordinator, at 307-775-6258, and 307-775-6206, respectively.

SUPPLEMENTARY INFORMATION:

This coal lease sale is being held in response to a lease by application (LBA) filed by Powder River Coal Company of Gillette, WY. The coal resources to be offered consist of all reserves recoverable by surface mining methods in the following-described lands located in southeastern Campbell County approximately 6 miles east of State Highway 59, 10 miles south of State Highway 450, and adjacent to the Piney Canyon and Antelope County Roads:

T. 42 N., R. 70 W., 6th PM, Wyoming

Sec. 28: Lots 5-16;

Sec. 29: Lots 5-16;

Sec. 30: Lots 9-20;

T. 42 N., R. 71 W., 6th PM, Wyoming

Sec. 25: Lots 5-15;

Sec. 26: Lots 7-10;

Sec. 35: Lots 1, 2, 7-10, 15, 16.

Containing 2,369.38 acres, more or less.

The tract is adjacent to Federal and State of Wyoming coal leases to the south held by the North Antelope Rochelle Mine. It is also adjacent to additional unleased Federal coal to the east, north, west, and southwest.

All of the acreage offered has been determined to be suitable for mining. Features such as the county roads and pipelines can be moved to permit coal recovery. Numerous oil and/or gas wells have been drilled on the tract. The estimate of the bonus value of the coal lease will include consideration of the future production from these wells. An economic analysis of this future income stream will determine whether a well is bought out and plugged prior to mining or re-established after mining is completed. The surface estate of the tract is owned by the North Antelope Rochelle Mine and the United States.

The tract contains surface mineable coal reserves in the Wyodak seam currently being recovered in the adjacent, existing mine. On the tract, the Wyodak seam is generally a single seam averaging about 77 feet thick. A small area in the northeast corner of the LBA has a split off the bottom of the main seam. This split starts at about 17 feet thick but thins rapidly to the east. The interburden increases to about 15 feet thick at the eastern edge of the LBA. The overburden depths range from about 290 to 365 feet thick on the LBA.

The tract contains an estimated 324,627,000 tons of mineable coal. This estimate of mineable reserves includes the main Wyodak seam and split mentioned above but does not include any tonnage from localized seams or splits containing less than 5 feet of coal. It does not include the State of Wyoming coal although these reserves are expected to be recovered by the NARO mine. The total mineable stripping ratio (BCY/Ton) of the coal is about 3.9:1. Potential bidders for the LBA should consider the recovery rate expected from thick seam and multiple seam mining.

The NARO North LBA coal is ranked as subbituminous C. The overall average quality on an as-received basis is 9090 BTU/lb with about 0.25% sulfur and 2.4% sodium in the ash. These quality averages place the coal reserves at the top of the range of coal quality currently being mined in the Wyoming portion of the Powder River Basin.

The tract will be leased to the qualified bidder of the highest cash amount provided that the high bid meets or exceeds BLM's estimate of the fair market value of the tract. The minimum bid for the tract is $100 per acre or fraction thereof. No bid that is less than $100 per acre, or fraction thereof, will be considered. The bids should be sent by certified mail, return receipt requested, or be hand delivered. The Cashier will issue a receipt for each hand-delivered bid. Bids received after 4 p.m., on Monday, August 30, 2004, will not be considered. The minimum bid is not intended to represent fair market value. The fair market value of the tract will be determined by the Authorized Officer after the sale. The lease issued as a result of this offering will provide for payment of an annual rental of $3.00 per acre, or fraction thereof, and of a royalty payment to the United States of 12.5 percent of the value of coal produced by strip or auger mining methods and 8 percent of the value of the coal produced by underground mining methods. The value of the coal will be determined in accordance with 30 CFR 206.250.

Bidding instructions for the tract offered and the terms and conditions of the proposed coal lease are available from the BLM Wyoming State Office at the addresses above. Case file documents, WYW150210, are available for inspection at the BLM Wyoming State Office.