GILLETTE - The first of five new federal coal lease tracts in the southern Powder River Basin could go up for competitive, sealed bid as soon as June 28, according to the Bureau of Land Management.

The Record of Decision for the North Antelope Rochelle South (NARO South) Lease by Application (LBA) tract was published in the Federal Register on Friday, triggering a 30-day appeals period before the tract can be opened for bid.

NARO South is among five new federal coal leases expected to come up for bid this year, according to the BLM, making available a total of 1.5 billion tons of coal. At today's market price of approximately $7 per ton of coal, the new reserves represent $10.5 billion in potential sales.

The potential tax revenue from the NARO South LBA is expected to be in the hundreds of millions of dollars. Half of that would go to the state, half to the federal government.

Marion Loomis, executive director of the Wyoming Mining Association, said the new leases are vital to Wyoming's coal industry.

"These LBAs are major leases that are necessary to continue the viability of the mining operations," Loomis said. "At 370 million tons per year, those reserves get eaten up fairly quickly."

Peabody Energy subsidiary Powder River Coal Co. nominated the NARO South tract for lease. BLM approved of the tract through an Environmental Impact Statement that included four other LBA tracts in the southern portion of the basin.

NARO South, as approved by the BLM, includes approximately 2,956 acres with an estimated 345 million tons of in-place coal reserves in Campbell and Converse counties. The BLM modified Powder River Coal Co.'s proposal to add coals that otherwise might be passed up and to increase competition among area mines for the tract, according to the BLM.

Nancy Doelger of the BLM Casper Field Office said NARO South is adjacent to both Powder River Coal Co.'s North Antelope Rochelle mine and Kennecott Energy's Antelope mine. Both companies, or any other qualified bidder not adjacent to the tract, may make a bid for the property in the competitive bidding process, according to Doelger.

Each of the five new LBAs up for bid this year are considered "maintenance" tracts. Mines typically nominate tracts that are adjacent to their existing operations. Powder River Coal Co. nominated two tracts - NARO South and the North Antelope Rochelle North (NARO North) tract - also to maintain production at its North Antelope Rochelle mine.

Kennecott Energy nominated the West Antelope LBA, which the BLM modified and approved of earlier this year. Doelger said the BLM may modify lease proposal to make them more competitive and to maximize the potential revenue generated by the public resources.

Over the years, bidding has become more competitive in southern portion of the basin - an area where five mines produce approximately 231.8 million tons of coal annually, serving nearly 30 percent of the nation's annual coal consumption. Kennecott Energy's Jacobs Ranch mine and Arch Coal Inc.'s Black Thunder mine have competed on two separate tracts in recent years.

The competition between the two mines was highlighted in 2002 when Jacobs Ranch paid $379.5 million for a tract north of the mine containing 537 million tons of federal coal. That deal netted the state of Wyoming a total of $189.7 million and extended the life of the Jacobs Ranch mine by 18 years, according to Kennecott Energy.

In its NARO South record of decision, the BLM noted that there are currently no coalbed methane wells within the proposed lease tract. The agency's environmental analysis of the area suggested that the gas content of the coal is relatively low compared to other coals in the basin being targeted for commercial methane production.