2011-7596. 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 West Antelope II South Coal Tract described below in Converse County, Wyoming, will be offered for competitive lease by sealed bid in accordance with the provisions of the Mineral Leasing Act of 1920, as amended.

DATES:

The lease sale will be held at 10 a.m., on Wednesday, June 15, 2011. Sealed bids must be submitted on or before 4 p.m., on Tuesday, June 14, 2011.

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, Wyoming 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 Tyson Sackett, Acting Coal Coordinator, at 307-775-6258, and 307-775-6487, respectively.

SUPPLEMENTARY INFORMATION:

This coal lease sale is being held in response to a lease by application (LBA) filed by Antelope Coal LLC, Gillette, Wyoming. The coal resource to be offered consists of all reserves recoverable by surface mining methods in the following described lands located 2-4 miles south of the Campbell/Converse County line and 1-3 miles east of State Highway 59.

T. 40 N., R. 71 W., 6th Principal Meridian

Sec. 5, lot 18;

Sec. 8, lots 1 through 3 inclusive, lots 6 through 11 inclusive, and lots 14 through 16 inclusive;

Sec. 9, lots 2 through 16 inclusive;

Sec. 10, lots 5, 6, and lots 11 through 14 inclusive;

Sec. 14, lot 13; and

Sec. 15, lots 2 through 7 inclusive, and lots 10 through 16 inclusive.

Containing 1,908.60 acres, more or less in Campbell and Converse Counties, Wyoming.

The LBA tract is adjacent to the western and southern lease boundary of the Antelope Mine and to Federal leases to the east and north as well as a State of Wyoming lease, all controlled by the Antelope Mine. It is adjacent to additional unleased Federal coal to the west and south.

All of the acreage offered has been determined to be suitable for mining except for the county road and right-of-way in the far southeast portion of the LBA tract. However, the county road as well as pipelines and utilities can be moved to permit coal recovery. Antelope Creek crosses a small corner in the far northwest portion of the LBA tract, and no mining will take place on the creek or a 100 foot buffer on either side of it. No producing oil and/or gas wells have been drilled on the LBA tract. The surface estate of the LBA tract is largely owned by Antelope Coal Company except for six lots in the southeast part of the tract managed by the United States Forest Service.

The tract contains surface mineable coal reserves in the Wyodak-Anderson coal zone currently being recovered in the adjacent existing mine. Although two primary coal seams occur on the LBA tract (the Anderson and the Canyon), only the Anderson is considered to be mineable due to thickness and incremental stripping ratio. The Canyon splits into several seams and, at various locations on the LBA tract, individual splits are either absent completely, are too thin, or are too deep to be included based on current market conditions and production costs. The Anderson seam varies from about 17 to 25 feet thick. Overburden to the Anderson seam ranges from approximately 80 to 160 feet thick on the LBA.

The tract contains an estimated 56,356,000 tons of mineable coal. This estimate of mineable reserves includes the main Anderson seam mentioned above but does not include any tonnage from localized seams or splits containing less than 5 feet of coal. It does not include coal in the deeper Canyon seam splits. In addition, it does not include the adjacent State of Wyoming coal, although these reserves may be recovered in conjunction with the LBA tract. It also excludes coal within and along Antelope Creek. The total mineable stripping ratio of the coal in bank cubic yards per ton is approximately 5.0:1. Potential bidders for the LBA should consider the recovery rate expected from single seam mining.

The West Antelope II South LBA coal is ranked as subbituminous C. The overall average quality for the Anderson seam on an as-received basis is 8,807 British Thermal Units per pound containing approximately 0.28 percent sulfur. The average quality of the Anderson seam make the coal reserves equal to some of the best quality coal currently being mined in the Wyoming portion of the Powder River Basin.

The tract will be leased to the qualified bidder offering the highest cash amount provided that the high bid meets or exceeds the BLM 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 BLM Wyoming State Office Cashier will issue a receipt for each hand-delivered bid. Bids received after 4 p.m. local time, on Tuesday, June 14, 2011, 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 per acre, or fraction thereof, and a royalty payment to the United States of 12.5 percent of the value of coal produced by surface 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 address above. Case file documents, WYW177903, are available for inspection at the BLM Wyoming State Office.

Donald A. Simpson,

State Director.