According to federal data, the block contains 3.2 million tons of recoverable coal with a royalties value of about $US5 million.

The lease sale has been set for August 22 at 8am local time

The proposed Sage Creek underground operation in western Colorado near Hayden will ultimately replace the prolific Twentymile operation. That mine is projected to be played out within the next four to five years.

Should the BLM find a bid that meets or exceeds its set fair market value, a minimum bid of $100 per acre, the winner will pay an annual rental fee of $3 per acre as well as an 8% royalty on the developed coal.

The state and federal government will evenly split the royalties received from the tract’s coal.

About 90% of Colorado’s coal deposits occur on public lands. There are nine producing coal mines in the state, seven underground and two surface, that make up 75,000 acres.

Coal energy production on BLM Colorado public lands directly contributed $884 million to the economy last year.