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Bid on coal tract nearly doubles
By The News-Record staff
A subsidiary of Rio Tinto Energy America more than doubled its original bid for a 426-acre coal tract south of Gillette.Cordero Mining Co. submitted a sealed bid of $43,797,200 for a Bureau of Land Management coal lease that is estimated to have about 54.7 million tons of mineable coal, according to agency spokesman Roger Alexander.
The bid, unsealed Wednesday morning, averages out to about 80 cents per ton, and far exceeds a previous attempt by Cordero to win the North Maysdorf tract.
Alexander expected a decision on whether the bid is accepted to be made by the BLM later Wednesday afternoon. Industry officials will be watching closely to see what indications the bid has for prices on future lease sales.
The company bid $21,001,419 for the same coal in October, a move the BLM rejected. Many within the industry said it would have been a bargain-basement price. That bid averaged out to just 38.4 cents a ton.
Last month, Foundation Coal won a bid for a coal lease west of its Eagle Butte mine, paying $180.5 million for a 255 million ton track or 70.8 cents per ton.
The money is paid over five years — half of which goes to the state. Much of the state’s money is used for state schools construction.
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