BLM continues to prepare Wyoming coal leases

Washington (Platts)--2Apr2007

Subsidiaries of Foundation Coal, Arch Coal, Peabody Energy and Rio Tinto
Energy America hope to eventually be able to bid on a total of 827.5 million
short tons of southern Powder River Basin coal after federal agencies complete
a lengthy process of holding public meetings and writing volumes of reports
leading to competitive bidding on the four parcels.

In a move that may streamline the process, the Bureau of Land Management's
Casper field office and the Office of Surface Mining are preparing to work on
one environmental impact statement that would consolidate work on the four
proposed coal leases, BLM said Friday.

The South Gillette Area Coal EIS would include information on the potential
and cumulative impacts of leasing coal tracts in Campbell County, Wyoming, to
RAG Wyoming Land, Ark Land, Caballo Coal, and Cordero Mining. The companies
say these tracts are needed to extend the life of their mines.

Teresa Johnson, environmental protection specialist at BLM, told Platts that
it may take more than a year for the agency to weigh the comments it receives
from the public and prepare the final EIS.

"The mines are next to each other, so we can treat them as a single unit"
during the EIS process, she said, which should make the process easier to do
than preparing an EIS for each mine. Ultimately, the length of the EIS process
will depend on how many comments the agency receives, and that will not be
known until the agency holds a public scoping meeting on April 11.

RAG, part of Foundation Coal Holdings, applied to lease a tract next to its
Belle Ayr mine. The tract, which is roughly 1,578 acres, is estimated to
contain about 200 million st. Ark Land subsidiary Thunder Basin Coal, part of
Arch Coal, wants to lease 1,151 acres adjacent to its Coal Creek mine in the
hopes of accessing about 57 million st. Peabody Energy subsidiary Caballo Coal
wants to lease roughly 777 acres of land next to its Caballo mine containing
about 87.5 million st. Finally, RTEA subsidiary Cordero Mining is seeking to
lease 4,653 acres of land that contains about 483 million st next to its
Cordero Rojo mine.

--Regina Johnson, regina_johnson@platts.com and
--Marcin Skomial, marcin_skomial@platts.com