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BLM>Colorado>Field Offices>Uncompahgre>Minerals Management>Active Federal Coal Leasing
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Active Federal Coal Leasing

The UFO manages active federal coal leases for all BLM managed coal in the southern half of the state of Colorado.  Operating mines are located in the UFO, Grand Junction Field Office (GJFO), and the San Juan Field Office (SJFO).  Three mines are within the UFO while there are one each in the GJFO and SJFO.  The three mines in the UFO are all located in the valley of the North Fork of the Gunnison river near Paonia Colorado.  The mine in the SJFO is located on Red Mesa near Hesperus Colorado, about 12 miles west of Durango.  The mine in the GJFO is located 19 miles north of Loma Colorado, about 35 miles west of Grand Junction.

The table below shows BLM Field Offices with their related mining companies, mines, and typical yearly coal production for each mine.

Related BLM Field OfficeCompany NameMine NameYearly Coal Production (Tons)
UFO
Bowie Resources, LLCBowie No. 2
5,000,000
UFO
Mountain Coal CompanyWest Elk
6,400,000
UFO
Oxbow Mining, LLCElk Creek
6,000,000
GJFO
Central Appalachia MiningMcClane Canyon
325,000
SJFO
National King CoalKing
420,000

 

Although each mine controls coal reserves having a ratio of federal coal mixed with fee coal, about 80% of the production is federal coal, and as time goes by the fee coal will be depleted, leaving only federal coal available in the reserve base.  Some federal coal leases have a 5% royalty by virtue of difficult geologic and engineering conditions; however, most of the coal is mined at an 8% royalty.  The resulting revenue from federal coal production royalties paid to the federal treasury by these five mining companies approaches $15 million each year.  Half of that revenue is returned to the State of Colorado.