05-9. Notice of Competitive Coal Lease Sale Reoffer, Wyoming

AGENCY:

Bureau of Land Management, Interior.

ACTION:

Notice of competitive coal lease sale reoffer.

SUMMARY:

Notice is hereby given that certain coal resources in the West Roundup Tract described below in Campbell County, WY, will be reoffered 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 reoffer will be held at 10 a.m., on Wednesday, February 16, 2005. Sealed bids must be submitted on or before 4 p.m., on Tuesday, February 15, 2005.

ADDRESSES:

The lease sale reoffer 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 Triton Coal Company, LLC of Gillette, WY. The West Roundup Tract was previously offered on October 27, 2004, and the one bid received at that sale was rejected because it did not meet the BLM's estimate of fair market value. The coal resources to be offered consist of all reserves recoverable by surface mining methods in the following-described lands located southeast of Wright, Wyoming, in southeastern Campbell County approximately 7 miles east of State Highway 59 and 5 miles south of State Highway 450:

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

Sec. 4: Lots 17, 18;

Sec. 5: Lots 17-20;

Sec. 6: Lots 8-23;

Sec. 7: Lots 5-14;

Sec. 8: Lots 1-12;

Sec. 9: Lots 1-8, 11-14;

T. 43 N., R. 70 W., 6th P.M, Wyoming

Sec. 31: Lots 13-20;

T. 42 N., R. 71 W., 6th P.M, Wyoming

Sec. 1: Lots 5, 6, 11-14, 19, 20.

Containing 2,812.51 acres, more or less.

The tract is crossed by the Reno County Road and by the rail spur to the North Rochelle Mine and is adjacent to Federal coal leases held by the North Rochelle Mine to the east and the Black Thunder Mine to the north, and to State of Wyoming coal leases to the northwest and southeast. The northwest State lease is controlled by the Black Thunder Mine while the southeast State lease is controlled by the North Antelope/Rochelle Mine. The tract is also adjacent to additional unleased Federal coal to the south and west.

All of the acreage offered has been determined to be suitable for mining except lands under the existing rail loop and plant facilities serving the North Rochelle Mine. These areas are protected from premature development by a USDA-Forest Service special use permit, which has determined that these areas are unsuitable for mining. However, these areas can be made suitable for mining by removing these features and using temporary loadout facilities farther west at the end of mine life. Other features, such as the county road, can be moved to permit coal recovery. In addition, 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. A small portion of the surface estate of the tract is controlled by the North Rochelle Mine but most of the surface estate is controlled by the United States and the Black Thunder Mine.

The tract contains surface mineable coal reserves in the Wyodak seam currently being recovered in the adjacent, existing mines. On the tract, the Wyodak is generally a thick seam with one thin upper split and two thin lower splits. The lower splits are not continuous over the LBA tract, but are often merged into the main seam. The upper split is generally present, but is often too thin to recover. The main seam ranges from about 53-79 feet thick, while the splits range from about 0-16 feet thick for the upper one and from about 0-8 and 0-5 feet thick for each of the lower two, respectively, where they occur. The overburden depths range from about 185-465 feet thick on the LBA. The interburden between the upper split and the main seam is from 0-30 feet, while the lower splits are from 0-13 feet from the main seam and from 0-7 feet from each other.

The tract contains an estimated 327,186,000 tons of mineable coal. This estimate of mineable reserves includes the main seam and splits mentioned above but does not include any tonnage from localized seams or splits containing less than 5 feet of coal. The tract includes approximately 76,355,000 tons of mineable coal under the rail spur and plant facilities serving the North Rochelle Mine, which can be mined at the end of mine life. It does not include either the State of Wyoming coal in the northwest, which is expected to be recovered by the Black Thunder Mine, or the State of Wyoming coal in the southeast, which is not expected to be recovered at this time. The total mineable stripping ratio (BCY/Ton) of the coal is about 4.3:1. Potential bidders for the LBA should consider the recovery rate expected from thick seam and multiple seam mining.

The West Roundup LBA coal is ranked as subbituminous C. The overall average quality on an as-received basis is 8790 BTU/lb with about 0.2% sulfur and 1.6% sodium in the ash. These quality averages place the coal reserves near the high end 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 the 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 Tuesday, February 15, 2005, 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, WYW151134, are available for inspection at the BLM Wyoming State Office.

Phillip C. Perlewitz,

Acting Deputy State Director, Minerals and Lands.