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Royalty Rate Reductions

Am I always required to pay royalty at the rate specified in my lease?
BLM expects as much coal to be produced as possible at the royalty rate specified in the lease. However, BLM does recognize that as circumstances change, instances will occur where the lease royalty rate is detrimental to attaining the greatest ultimate recovery of the coal resource. Under certain circumstances BLM can, upon application by the lessee or operator, temporarily reduce the royalty rate for a specific area of coal. The general requirements for a royalty rate reduction are:

  • Royalty rate reduction must encourage the greatest ultimate recovery of the coal resource.
  • Royalty rate reduction must be in the interest of conservation of the coal and other resources.
  • In the judgement of BLM, the reduced royalty rate is necessary to promote development of the coal resource.

Contact a local BLM office for specific instructions.