E7-7842. 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 Pit 14 Coal Tract described below in Sweetwater 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 (30 U.S.C. 181 et seq.).

DATES:

The lease sale will be held at 10 a.m., on Tuesday, June 5, 2007. Sealed bids must be submitted on or before 4 p.m., on Monday, June 4, 2007.

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 Black Butte Coal Company, Point of Rocks, Wyoming. The coal resources to be offered consist of all reserves recoverable by surface mining methods in the following-described lands located in Sweetwater County, 28 miles southeast of Rock Springs, Wyoming, approximately 14 miles south of Interstate 80, about 3 miles east of Black Butte Creek, and just southwest of the permit boundary of the existing Black Butte surface mine:

T. 17 N., R. 101 W., 6th P.M., Wyoming

Section 2: Lots 3, 4, SW1/4NW1/4;

Section 4: Lots 1, 2, S1/2NE1/4, SE1/4NW1/4, NE1/4SW1/4, S1/2SW1/4, SE41/4;

Section 10: NW1/4, N1/2SW1/4;

T. 18 N., R. 101 W., 6th P.M., Wyoming

Section 34: E1/2, E1/2NW1/4, SW1/4;

Containing 1,399.48 acres more or less.

All of the acreage applied for has been determined to be suitable for surface mining. There are no existing surface facilities or structures that will be impacted by the proposed pit. There are no producing oil and/or gas wells on the tract. All of the surface and mineral estate on the LBA tract is controlled by the BLM.

The tract contains surface mineable coal reserves within the Upper Cretaceous Almond Formation. In the LBA area, the coal cropline extends roughly southwest to northeast along the northwestern edge of the proposed pit.

Mining is expected to begin along this cropline. The coal seams dip more rapidly than the ground surface toward the southeast and an economic cutoff of about 200 feet of overburden is projected for the final mine cut.

Numerous coal seams occur in the immediate area, but only four are considered to be mineable within the proposed pit. These are identified, in descending order, as the AG, AF, AFL, and AE seams. The AG is the uppermost seam and is the most consistent over the LBA, generally ranging from 4-6 feet thick. The interburden between the AG and AF seams ranges from about 5-40 feet thick on the LBA. The AF seam ranges from 2-12 feet thick on the LBA and is joined with the AE seam near the cropline in Section 4. The AFL seam is a localized split that is largely confined to Section 34. The parting between the AF and AFL seams ranges from 0-20 feet thick and the AFL seam itself ranges from 2-3 feet thick on the LBA. The interburden between the AF and AE seams ranges from 0-45 feet thick on the LBA. The AE seam varies from 2-8 feet thick on the LBA. The composite mineable coal thickness ranges from 10-20 feet thick over the LBA.

The LBA tract contains an estimated 11,218,740 tons of mineable coal in the four seams described above that could be recovered by surface mining methods. This mineable reserve is based on a minimum 20 foot overburden thickness to avoid any coal oxidation areas, a minimum coal thickness of 2 feet, and a maximum stripping ratio of 14.6:1 (bank cubic yards per ton of coal). Other coal seams and splits are found in the LBA area, but these have not been included in this reserve estimate due to thickness, depth, poor quality, limited areal extent, or any combination of factors.

Potential bidders must establish their own practicable criteria for mining, including their estimate of recoverable reserves based on multiple seams and thin seam mining.

The Pit 14 LBA coal is ranked as subbituminous B. The overall average quality is approximately 9965 BTU/lb with about 7.57% ash and 0.54% sulfur. These quality averages are generally higher than those for the coal reserves currently being mined at the adjacent surface mine.

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. 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, June 4, 2007, 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, WYW160394, are available for inspection at the BLM Wyoming State Office.

Dated: March 8, 2007.

Alan Rabinoff,

Deputy State Director, Minerals and Lands.