GILLETTE - Powder River Coal Co. will pay more than $299 million for 324.6 million tons of federal coal in the southern Powder River Basin, according to the Bureau of Land Management.

The reserves are located next to the North Antelope Rochelle mine, which directly employs about 800 people. Aside from the mine's existing reserves, the new lease represents about four years of production for the mine.

Powder River Coal Co., a subsidiary of Peabody Energy, was the only company to place a bid on the North Antelope Rochelle North lease by application on Thursday. The BLM had rejected an earlier bid by the company because it didn't meet the agency's estimated market value for the coal lease.

This week's successful bid represents 92 cents per ton, which matches the highest amount ever paid for federal coal in Wyoming, said Mavis Love, BLM land law examiner.

Half of the $299 million "bonus bid" payment will come back to the state of Wyoming. In all, the BLM in Wyoming has leased more than 1.7 billion tons of coal in the Powder River Basin in 2004 for a total of more than $1.3 billion.

Those numbers, combined with Peabody's whopping 92-cents-per-ton investment, are indications that Wyoming's coal industry is running strong, said Larry Metzroth, vice president of fuel advisory services for Global Energy Advisors in Texas.

"I think the coal companies that have a position in the Wyoming Powder River Basin are in very good competitive shape as far as the national coal market is concerned," Metzroth said.

The price of coal from Eastern states has risen sharply in the past 18 months, primarily due to the growing expense of chasing coal seams deeper and deeper into the ground. Metzroth said utilities in the Carolinas are paying upward of $50 per ton for Eastern-origin coal, and that gives Powder River Basin an edge to gain new markets.

"Heretofore, Powder River Basin has kind of stopped at the Ohio/Pennsylvania border," Metzroth said. "So now Powder River Basin coal competes very effectively on a delivered cost basis - even with these somewhat higher leasing costs."

Mines in the basin collectively produce about 363 million tons of coal every year, representing 35 percent of the nation's coal supply. About half of the nation's electricity comes from coal-fired power generation.

Energy reporter Dustin Bleizeffer can be reached at (307) 682-3388 or dzeffer@trib.com.