E8-4891. 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 South Maysdorf Coal Tract described below in Campbell County, Wyoming, 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 Tuesday, April 22, 2008. Sealed bids must be submitted on or before 4 p.m., on Monday, April 21, 2008.

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 Cordero Mining Company, Gillette, Wyoming. The South Maysdorf Coal Tract was previously offered on November 28, 2007, and the one bid received at that sale was rejected because it did not meet the Bureau of Land Management's estimate of fair market value. The coal resource to be offered consists of all reserves recoverable by surface mining methods in the following-described lands located in central Campbell County approximately 3-4 miles east of State Highway 59, 6-11 miles south of Bishop Road, and adjacent to the western and southern lease boundary of the Cordero Rojo mine:

T. 46 N., R. 71 W., 6th P.M., Wyoming

Section 4: Lots 5 through 7, 10 through 15, 18 through 20;

Section 9: Lots 1 through 5;

Section 10: Lots 1 through 6;

Section 11: Lots 1 through 12;

T. 47 N., R. 71 W., 6th P.M., Wyoming

Section 21: Lots 1 through 3, 6 through 11, 14 through 16;

Section 28: Lots 1 through 3, 6 through 11, 14 through 16;

Section 33: Lots 1 through 3, 6 through 11, 14 through 16.

Containing 2,900.24 acres more or less.

The tract is adjacent to Federal and State of Wyoming leases to the east and north controlled by the Cordero Rojo Mine. It is adjacent to additional unleased Federal coal to the west and south. It is also adjacent to about 540 acres of private coal controlled by the Cordero Rojo Mine. All of the acreage offered has been determined to be suitable for mining except for the main line railroad right-of-way in the far southeast portion of the LBA. Features such as the county roads and pipelines can be moved to permit coal recovery. The Belle Fourche River crosses the LBA, but can be diverted to allow mining. 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. The surface estate of the tract is owned by Cordero Mining Company, Cordero Rojo, Inc., a private individual, 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 LBA tract, the Wyodak seam is generally a single seam averaging about 60 feet thick. An area containing no coal trends east/west across portions of section 4 in the southern portion of the LBA. Also, the southern portion of the LBA may have a rider of approximately 5-7 feet thick, which splits off the main seam with interburden ranging from 4-25 feet thick. Overburden depths to the Wyodak seam range from 60-340 feet thick on the LBA.

The tract contains an estimated 288,082,000 tons of mineable coal. This estimate of mineable reserves includes the main Wyodak seam and rider 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 adjacent State of Wyoming or private coal although these reserves are expected to be recovered in conjunction with the LBA. It also excludes coal within and along the railroad right of way as required by typical mining practices. The total mineable 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 Maysdorf South LBA coal is ranked as subbituminous C. The overall average quality on an as-received basis is 8404 BTU/lb with about 0.29% sulfur. These quality averages place the coal reserves near the lower/middle 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 Monday, April 21, 2008, 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 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, WYW174407, are available for inspection at the BLM Wyoming State Office.

Dated: March 6, 2008.

Larry Claypool,

Acting Deputy State Director, Minerals and Lands.