04-19153. 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 Little Thunder 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 10 a.m., on Wednesday, September 22, 2004. Sealed bids must be submitted on or before 4 p.m., on Tuesday, September 21, 2004.

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:

Julie Weaver, Land Law Examiner, or Robert Janssen, Coal Coordinator, at [phone], and [phone], respectively.

SUPPLEMENTARY INFORMATION:

This coal lease sale is being held in response to a lease by application (LBA) filed by Ark Land Company. The Federal coal tract being considered for sale is adjacent to the Black Thunder Mine operated by Thunder Basin Coal Company. Ark Land Company and Thunder Basin Coal Company are both subsidiaries of Arch Coal, Inc., of St. Louis, Missouri. The coal resources to be offered consist of all reserves recoverable by surface mining methods in the following-described lands located in southeast of Wright, Wyoming, in southeastern Campbell County approximately 6 miles east of State Highway 59, crossed by State Highway 450, and adjacent to the BNSF/UP joint rail line.

T. 43 N., R. 71 W., 6th PM, Wyoming

Sec. 1: Lot 16 (S1/2).

Sec. 2: Lots 5-20.

Sec. 11: Lots 1-16.

Sec. 12: Lots 2 (W1/2,SE1/4), 3-16.

Sec. 13: Lots 1-16.

Sec. 14: Lots 1-15, NW1/4NW1/4.

Sec. 24: Lots 1-16.

Sec. 25: Lots 1-16.

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

Sec. 35: Lots 1-16.

Containing: 5,083.50 acres, more or less.

The tract is adjacent to Federal coal leases to the east held by the Black Thunder Mine, to State of Wyoming coal leases to the east and south held by Black Thunder Mine and to a Federal coal lease by a common section corner held by the Jacobs Ranch Mine to the northeast. It is also adjacent to additional unleased Federal coal to the north, west, and southwest.

All of the acreage offered has been determined to be suitable for mining except lands within 100 feet of the joint rail line right-of-way. Other features such as the county road and pipelines can be moved to permit coal recovery. In addition, temporary loadout facilities can be used at the end of the mine life to recover coal under the rail spur which also crosses the LBA tract. Finally, 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. Small portions of the surface estate of the tract are owned by B.N. railroad and a private trust, but most of the surface estate is controlled by the Black Thunder Mine and United States.

The tract contains surface mineable coal reserves in the Wyodak seam currently being recovered in the adjacent, existing mines. On the LBA tract, the Wyodak seam is generally a thick seam with one upper split, one lower split, and two thin deeper splits. These splits are not continuous over the LBA tract but are often merged into the main seam. The main seam ranges from 63-77 feet thick while the splits range from 0-15 feet thick for the upper one, from 0-15 feet thick for the lower one, and from 0-5 feet thick for each of the lower two. The overburden depths range from about 195-400 feet thick on the LBA. The interburden ranges from 0-125 feet thick between the upper split and the main seam, from 0-12 fee thick between the lower split and the main seam, and from 0-6 feet thick between the individual lower splits.

The tract contains an estimated 718,719,000 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. It does not include the State of Wyoming coal although these reserves are expected to be recovered by the Black Thunder Mine. The total mineable stripping ratio (BCY/Ton) of the coal is about 3.4:1. Potential bidders for the LBA should consider the recovery rate expected from thick seam and multiple seam mining. The Little Thunder LBA coal is ranked as subbituminous C. The overall average quality on an as-received basis is 8884 BTU/lb with about 0.24% sulfur and 1.2% 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 estimated 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, September 21, 2004, 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, WYW150318, are available for inspection at the BLM Wyoming State Office.

Alan Rabinoff,

Deputy State Director, Minerals and Lands.