01-30533. North Jacobs Ranch Tract, Wyoming; Competitive Coal Lease Sale

AGENCY:

Bureau of Land Management, Interior.

ACTION:

Notice of competitive coal lease sale.

SUMMARY:

Notice is hereby given that certain coal resources in the North Jacobs Ranch 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 2 p.m., on Wednesday, January 16, 2002. Sealed bids must be submitted on or before 4 p.m., on Tuesday, January 15, 2002.

ADDRESSES:

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

FOR FURTHER INFORMATION CONTACT:

Mavis Love, Land Law Examiner, or Melvin Schlagel, Coal Coordinator, at 307-775-6258 and 307-775-6257, respectively.

SUPPLEMENTARY INFORMATION:

This coal lease sale is being held in response to a lease by application (LBA) filed by Jacobs Ranch 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 near Wright, WY, approximately 7 miles east of State Highway 59 and 2 miles north of State Highway 450:

T. 44 N., R. 70 W., 6th P.M.

Sec. 26: Lots 8 through 12;

Sec. 27: Lots 1 through 16;

Sec. 28: Lots 1 through 16;

Sec. 29: Lots 1 through 16;

Sec. 30: Lots 5 through 20;

Sec. 31: Lots 5 through 20;

Sec. 32: Lots 1 through 16;

Sec. 33: Lots 4, 5, 12, 13;

Sec. 35: Lot 1;

T. 44 N., R. 71 W., 6th P.M.

Sec. 25: Lots 1 through 16.

Containing 4,982.24 acres, more or less.

All of the acreage offered has been determined to be suitable for mining. The surface estate of the tract is controlled by the Jacobs Ranch Mine and the Black Thunder Mine. Also, approximately 200 acres of private coal is located adjacent to the tract at the eastern boundary and about 640 acres of State of Wyoming coal is located adjacent to the tract at the southwest boundary. These reserves might be recovered in conjunction with the LBA but are not included as part of this lease sale.

There are numerous oil and gas wells and coalbed methane wells 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. Other costs considered will include moving or removing roads, pipelines, and surface facilities.

The tract contains surface minable coal reserves in the Wyodak seam currently being recovered in the adjacent, existing mines. Recovery of the Wyodak seam can occur in three splits: the upper, middle, or lower depending on the specific geology encountered. On the LBA, there is generally only a single split with the upper Wyodak separated by a thin parting from the main seam. The two seams merge into a single seam in the western portion of the LBA as the parting pinches out. The upper seam averages 13 feet thick and the main seam averages 52 feet thick on the LBA. The lower Wyodak splits in the far eastern portion of the LBA requiring multiple seam recovery near the burnline along the eastern LBA boundary. An additional seam below the Wyodak occurs in the far western portion of the LBA but this thin seam is not considered to be minable due to the high incremental stripping ratio and relatively low quality. There are no coal outcrops on the tract. The overburden above the Wyodak seam ranges from about 70-300 feet thick on the LBA.

The tract contains an estimated 537,542,000 tons of minable coal. This estimate of minable reserves includes the Wyodak splits mentioned above but does not include any tonnage from localized seams or splits containing less than 5 feet of coal. The total minable stripping ratio (BCY/Ton) of the coal is about 3.5:1. Potential bidders for the LBA should consider the recovery rate expected from thick seam and multiple seam mining.

The North Jacobs Ranch LBA coal is ranked as subbituminous C. The overall average quality on an as-received basis is 8792 BTU/lb, 27.40% moisture, 5.46% ash, 0.45% sulfur, and 1.29% 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 equals 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, January 15, 2002, 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 augur 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, WYW146744, are available for inspection at the BLM Wyoming State Office.

Dated: December 5, 2001.

Phillip C. Perlewitz,

Acting Deputy State Director, Minerals and Lands.