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Last updated: 04/04/03

BLM Publishes Final Rule on Formation of Logical Mining Units

The Bureau of Land Management today published a final rule that modifies regulations governing the formation of Logical Mining Units (LMUs) in areas where companies lease Federal coal. The intent of the rule is to ensure the diligent development of Federal coal leases.

The rule responds to a 1994 General Accounting Office report, which recommended that the BLM amend its regulations to ensure that the agency not issue additional mineral leases to companies that are not meeting production requirements on their Federal coal leases. The GAO also recommended that the BLM establish regulatory criteria to ensure that companies do not form LMUs for the purpose of avoiding development requirements.

BLM Director Pat Shea said, "This rule will allow coal operators to continue to form LMUs where their formation will promote the efficient, economic, and orderly development of coal resources. The rule will prevent the formation of LMUs that will not serve these purposes."

The final rule:

• Limits leases that have not produced commercial quantities of coal within the first eight years of their diligent development period from being included in an LMU. However, if a portion of the area covered by the proposed LMU is currently producing coal, or is covered by an administratively complete application for a SMCRA mining permit -- or by an approved SMCRA mining permit -- then the area can be included in an LMU. (SMCRA is the acronym for the Surface Mining Control and Reclamation Act of 1977.)
• Allows a lessee or operator, as a result of standard business practices, to interrupt coal severance for brief periods and to remain qualified to receive additional leases.
• Establishes specific criteria for LMU approval.
• Clarifies that the 10-year holding period for the purpose of lessee qualification under Section 2(a)(2)A of the Mineral Leasing Act, as amended, is distinct from the 10-year diligent development period under Section 7(a) of the same Act.

A Logical Mining Unit is a consolidation of Federal coal leases and may include intervening or adjacent land in which the United States does not own the coal. An LMU enhances the efficiency of mining when the coal deposits cut across lease or ownership boundaries.

The final LMU rule, published in today's Federal Register, is the culmination of a rulemaking process that began in December 1994, when the BLM published a proposed rule. The Bureau received 14 comments on the proposed rule through March 29, 1995, when a 90-day comment period expired.

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