Company officials cited the economics of the 1338-acre block, which contains an estimated 149 million mineable tons, against the still-rough market.

The tract is adjacent to its 8400Btu Cordero Rojo surface mine in Campbell County, Wyoming.

Its sale was scheduled for Wednesday morning at the BLM Wyoming office and was put up for auction following a September 2006 lease by application from Cloud Peak subsidiary Cordero Mining for 4653 acres (approximately 504Mt of estimated coal).

“We carefully evaluated the estimated economics of this LBA in light of current market conditions, and the uncertainty caused by the current political and regulatory environment towards coal and coal powered generation and ultimately decided it was prudent not to bid at this time,” president and chief executive officer Colin Marshall said.

He also noted that, due to the north tract’s configuration as well as ownership positions of surrounding land, it felt a “significant portion” of the federal agency’s tonnage estimate would not be recoverable by its crews if it did win the block.

“In combination with prevailing 8400Btu market prices and projected costs of mining the remaining coal, we were unable to construct an economic bid for this tract at this time,” he said.

“We will continue to evaluate any possible future lease sales by the BLM of these tons in the North tract as market conditions improve.”

At press time, the BLM had not released the results of Wednesday’s sealed bid auction, however, it may prove to be unsuccessful because according to several reports it is the first time a bid has not been lodged for a coal tract.

Cloud Peak Energy is the only pure-play Powder River Basin coal company.

Its Antelope and Cordero Rojo mines are located in Wyoming and its Spring Creek operation is located near Decker, Montana.

Once the lease is issued to the highest qualified bidder, an annual rental payment of $US3 per acre is required, along with a royalty payment of 12.5% of the value of coal produced by surface mining methods.