Suitable lands for coal leasing

Not all public lands are available for coal exploration or leasing. There is a rigorous land use planning process through which all public lands are reviewed for potential coal leasing.  Requirements for the land use plan include multiple use, sustained yield, protection of critical environmental areas, application of specific unsuitability criteria, and coordination with other government agencies. There are four specific land use screening steps that are unique to developing land use planning decisions for federal coal lands. These are:

• Identification of coal with potential for development
• Determination if the lands are unsuitable for coal development
• Consideration of multiple use conflicts
• Surface owner consultation

The Federal Coal Leasing Amendments Act of 1976 (FCLAA) amended Section 2 of the Mineral Leasing Act of 1920 to require that all public lands available for coal leasing be offered competitively. Competitive leasing provides an opportunity for any interested party to competitively bid for a Federal coal lease. There are several specific requirements that are part of every competitively issued lease. These are:  a royalty rate of 12.5% for coal mined by surface mining methods and 8% for coal mined by underground mining methods.  There is a diligent development requirement that requires commercial quantities of coal to be produced from the lease within 10 years of lease issuance.  Commercial quantities of coal are discussed in the Critical Concepts section of this document.  Failure to meet this requirement will result in termination of the lease.  A lease can only be issued if the competitive bid for the lease meets or exceeds the BLM's estimate of fair market value.  Site specific stipulations to protect other resources.

Requirements and limitations for obtaining a Federal coal lease

In order to qualify for a Federal coal lease, you must:

• Be a citizen of the United States; or,
• An association of citizens organized under the laws of the United States or any state thereof; or,
• A corporation organized under the laws of the United States, or of any state thereof, including a company or corporation operating a common carrier railroad; or,
  a public body including municipalities.

In addition to these general qualifications, you must also comply with these special leasing qualifications:

• The aggregate acreage in leases and applications in which you can hold an interest, directly or indirectly, cannot exceed 75,000 acres in any one state and no more than 150,000 acres in the United States. 
• You may not acquire any other mineral leases under the Mineral Leasing Act of 1920, as amended, if you hold or have held a federal coal lease for 10 or more years that has not produced commercial quantities of coal.
  • Other minerals that can be leased under the Mineral Leasing Act of 1920 include oil, natural gas, sodium, potassium, phosphate, sulfur, and gilsonite. 
• As a part of your application for a new coal lease, you must provided a self-certified statement that you are in compliance with all applicable laws and regulations.

 Logical Mining Units (LMU)

An LMU allows the lessee or operator to consolidate the diligent development and continued operations requirements for all the Federal leases and other coal tracts within the boundaries of a mine. The acreage of both federal and non-federal lands within an LMU cannot exceed 25,000 acres. An LMU provides for continuity in management of the coal resource whenever the geologic characteristics of a coal seam cross property boundaries. LMU's have been defined as an area of land in which the coal can be developed in a efficient, economical, and orderly manner as a unit with due regard for conservation of the coal and other resources. Formation of an LMU requires an application and approval by BLM. Contact your local BLM Office for more specific instructions.