[Federal Register Volume 76, Number 117 (Friday, June 17, 2011)]
[Notices]
[Pages 35465-35466]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-14987]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

[[LLWY922000-L51100000-GA0000-LVEMK09CK36; WYW172657]


Notice of Competitive Coal Lease Sale, Wyoming

AGENCY: Bureau of Land Management, Interior.

ACTION: Notice of competitive coal lease sale.

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SUMMARY: Notice is hereby given that certain coal resources in the 
Caballo West Coal Tract described below in Campbell 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, August 17, 
2011. Sealed bids must be submitted on or before 4 p.m. on Tuesday, 
August 16, 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 
Kathy Muller Ogle, 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 BTU Western 
Resources, Inc. (successor to Caballo Coal Company), Gillette, Wyoming. 
The coal resource to be offered consists of all reserves recoverable by 
surface mining methods in the following-described lands located 
approximately 8 miles south-southeast of Gillette, Wyoming and east of 
State Highway 59.

T. 48 N., R. 71 W., 6th Principal Meridian

    Sec. 7, lots 12 and 19;
    Sec. 8, lot 10;
    Sec. 17, lots 1 through 12 inclusive and lots 15 and 16;
    Sec. 18, lots 5, 12, and 13;
    Sec. 20, lots 1, 2, and 8; and
    Sec. 21, lots 11 and 12.

    Containing 1,023.99 acres, more or less, in Campbell County, 
Wyoming.

    The LBA tract is adjacent to Federal, private, and State of Wyoming 
leases along the western lease boundary of the Caballo mine and to the 
Belle Ayr North LBA along the south. It is adjacent to additional 
unleased Federal coal to the west. The tract is crossed by Bishop Road 
along its southern boundary.
    All of the acreage offered has been determined to be suitable for 
mining. Features such as Bishop Road, utilities, and pipelines can be 
moved to permit coal recovery. In addition, several producing coal bed 
natural 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 the future income 
stream from coal mining will consider reasonable compensation to the 
gas lessee for lost production of the natural gas when the wells are 
bought out by the coal lessee. The surface estate of the tract is owned 
by Alpha Coal West, Inc., as well as private individuals and entities.
    The tract contains surface mineable coal reserves in the Wyodak-
Anderson

[[Page 35466]]

coal zone currently being recovered in the adjacent, existing mine. On 
the LBA tract, there is one recoverable seam, the Wyodak, which 
averages approximately 75 feet thick and is continuous over the entire 
tract with no outcrops or subcrops. Overburden depths to this seam 
average approximately 285 feet on the LBA.
    The tract contains an estimated 130,196,000 tons of mineable coal. 
This estimate of mineable reserves includes the main seam mentioned 
above but does not include any tonnage from localized seams or splits 
that are less than 5 feet of coal. Also, it does not include the 
adjacent private and State of Wyoming leases although these leases are 
expected to be mined in conjunction with the LBA tract. The total 
mineable stripping ratio of the coal in bank cubic yards per ton is 
approximately 4.2:1. Potential bidders for the LBA tract should 
consider the recovery rate expected from thick seam coal mining. The 
Caballo West LBA coal is ranked as subbituminous C. The overall average 
quality on an as-received basis is 8,501 British Thermal Units per 
pound containing about 0.33 percent sulfur. This quality places these 
coal reserves in the lower part of the range of coal quality currently 
being mined in the Wyoming portion of the Powder River Basin.
    The tract in this lease offering contains split estate lands. There 
are qualified surface owners as defined in the regulations at 43 CFR 
3400.0-5. Consent granted by the qualified surface owners has been 
filed with and verified by the BLM. The LBA tract lands included in the 
consent are:

T. 48 N., R. 71 W., 6th Principal Meridian

    Sec. 7, lots 12 and 19; and
    Sec. 18, lot 5.

    Containing 123.77 acres, more or less, in Campbell County, 
Wyoming.

    The purchase price of the consent as stated in the consent document 
is ``* * * a royalty of ten cents ($.10) per ton (2,000 pounds) of 
merchantable coal or one percent (1%) of the gross sale price of such 
coal F.O.B. the mine, whichever is greater.''
    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 (FMV) 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, August 16, 2011, will not be considered. The minimum bid is 
not intended to represent FMV. The FMV of the tract will be determined 
by the Authorized Officer after the sale. The lease that may be 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.
    Pursuant to the regulation at 43 CFR 3473.2(f), the applicant for 
the Caballo West Tract, BTU Western Resources, Inc., has paid a total 
case-by-case cost recovery processing fee in the amount of $78,660. The 
successful bidder for the Caballo West Tract, if someone other than the 
applicant, must pay to the BLM the $78,660 previously paid by BTU 
Western Resources, Inc. Additionally, the successful bidder must pay 
all processing costs the BLM will incur after the date this sale notice 
is published in the Federal Register, which are estimated to be 
$17,400.
    Bidding instructions for the LBA 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, 
WYW172657, are available for inspection at the BLM Wyoming State 
Office.

Donald A. Simpson,
State Director.
[FR Doc. 2011-14987 Filed 6-16-11; 8:45 am]
BILLING CODE 4310-22-P