BLM announces Wyoming coal lease sale Dec. 14

By Wyoma Groenenberg – Wyoming Business Report

The Bureau of Land Management (BLM) has announced a competitive coal lease sale by sealed bid at 10 a.m. on Wednesday, Dec. 14. The South Hilight Field Coal Tract, a 1,976.69-acre area containing an estimated 222.7 million tons of mineable coal, will be offered for lease, according to the BLM website.

The qualified high bidder that meets or exceeds BLM’s estimate of the fair market value of the tract will get the lease. The minimum bid for this tract is $100 per acre, or fraction thereof. The minimum bid is not intended to represent fair market value, the BLM noted.

This tract is being offered for sale in response to a lease by application (LBA) filed by Ark Land Company, St. Louis, Mo. The coal resource to be offered consists of all reserves recoverable by surface mining methods.

Adjacent to the southern and western lease boundary of the Black Thunder Mine, the tract is located about 2-5 miles south of State Highway 450 and east of the Burlington Northern/Union Pacific main line railroad.

The South Hilight Field Coal Tract also is adjacent to federal leases to the east and north, as well as an adjacent State of Wyoming lease, all controlled by the Black Thunder Mine. It is adjacent to unleased federal coal to the west and south.

Some of the surface estate of the tract is owned by Thunder Basin Coal Co., but most of the surface is part of the Thunder Basin National Grassland managed by the U.S. Forest Service.

Once a lease is issued, an annual rental payment of $3 per acre is required, along with a royalty payment 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.

“Wyoming contributed nearly 400 million tons of coal to the nation’s domestic energy supply in 2010,” said BLM Wyoming State Director Don Simpson. “Wyoming is the number one coal producer from public lands. Wyoming coal is used to generate electricity in 35 states.”

In the meantime, Wyoming state legislators are looking into the rising severance tax rates on coal, according to the Casper Star-Tribune. While producers applaud this move, Wyoming could stand to lose millions of dollars in severance tax revenues in the future. In 2010, that revenue totaled about $265 million, according to Wyoming’s Revenue Department estimates on 2009 production rates.

The lease sale will be held in the first floor conference room (room 107) at the BLM Wyoming State Office, 5353 Yellowstone Road, in Cheyenne.

Sealed bids should be sent by certified mail, return receipt requested, or hand delivered to the Cashier, BLM Wyoming State Office, 5353 Yellowstone Road, PO Box 1828, Cheyenne, WY 82003. Bids must be received no later than 4 p.m. on Tuesday, Dec. 13.

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This article first appeared on the Wyoming Business Report Website.

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