According to the Associated Press, Arch subsidiary Ark Land previously submitted the application on behalf of the producer. The Thunder Basin Coal division is seeking to expand its Coal Creek mine in Campbell County in the PRB.

However, the BLM said late last week, landowner Dennis Edwards is not allowing his land to be mined so talks did not result in a successful permission.

The federal agency oversees rights to federal land and minerals in the western US states. Regional offices of the BLM told the news service it was the first time a coal lease application had been denied in the 20-year the state had been receiving submittals from operators.

Officials in Casper and Cheyenne also said that, if circumstances changed, the denial was not final and could be updated.

"The record of decision is a document that can be appealed if the company or the landowner wishes to do so," a BLM High Plains District environmental protection specialist told the AP.

Arch Coal declined comment in a statement to media.

"We do not comment on matters related to a coal tract that's in an active leasing phase," company spokeswoman Kim Link said.

US interior secretary Ken Salazar announced earlier this year plans to sell 758 million tons of PRB coal via four auctions. One, for Cloud Peak’s Antelope mine, sold May 11 for approximately $US300 million, and the remaining three auctions are scheduled for June 15, July 13 and August 17.

While the West Coal Creek application was not involved in those sales, it was part of an additional 1.6Bt Salazar said would also be sold.

"Coal is a critical component of America’s comprehensive energy portfolio as well as Wyoming’s economy,” Secretary Salazar said in March.

“As the number one coal producer from public lands, Wyoming provided nearly 40 percent of the domestic coal used to generate electricity last year and it’s important that we continue to encourage safe production of this important resource.”