Bowie only bidder on rights to Green Hollow coal tract
SUFCO mine owners bid $22.85 million
SALT LAKE CITY—The Bureau of Land Management (BLM) has received a single sealed bid for nearly $23 million for the rights to mine coal from the Green Hollows coal tract.
Ryan Sutherland, public affairs specialist for the BLM, says the lease sale brought in just one bid by the Jan. 4 deadline from Canyon Fuels Company, which is a subsidiary of Bowie Resource Partners.
Bowie is the current owner of the SUFCO mine, the largest coal mine in Utah, which is adjacent to the 6,175-acre Green Hollows coal tract.
According to Sutherland, the exact bid was $22.85 million, or $3,700.17 per acre. Although there was only a single bid, Sutherland says the result is still considered preliminary and will not be confirmed until a BLM panel determines if the bid meets or exceeds the estimated fair market value for the coal resources contained in the tract. If the bid is below fair market value, it can be thrown out.
If the BLM panel determines that the bid meets or exceeds fair market value, the BLM still will only issue the lease after the Department of Justice has 30 days to conduct an anti-trust review of the bidder’s coal holdings.
If the coal lease is issued, the bidder will also be on the hook for an annual rental payment of $3 per acre, along with a royalty payment of 8 percent of the value of any coal extracted. Canyon Fuels has said it will extract the coal using underground mining methods.
Bowie Resource Partners has had its eye on the Green Hollows tract for a while. The estimated 55.7 million tons of recoverable coal is the key to Bowie’s plan to mine coal and export it to Asia to help meet the increasing demand for coal in that region.
To export the coal, Bowie has entered into a partnership with county officials from Sanpete, Sevier, Carbon and Emery counties. The partners have proposed to build a rail line to connect the four counties to the east-west Pacific Union Railroad, allowing the coal and other goods from Central Utah to be transported to a West Coast seaport for export.
The county officials collaborated to raise $53 million in funding from the Utah Community Impact Board (CIB) to help fund the project, with the goal of creating new coal mining jobs at SUFCO and Green Hollow and thereby bolstering the economies of their counties.