December 03, 2008

Wyoming rejects Cordero USD 44 million bid for coal lease

It is reported that for the second time in six months, the federal Bureau of Land Management Wyoming State Office has rejected a bid from Cordero Mining Co seeking to lease additional coal adjacent to its Powder River Basin mining operations.

Cordero a subsidiary of Rio Tinto Energy America bid USD 43.79 million for the North Maysdorf Tract, a 446 acre tract containing an estimated 54.7 million tonnes of mine able coal. The coal tract is located near the existing Cordero Mine about 15 miles south of Gillette.

Although Cordero’s latest bid was more than double its previous bid, but Bureau of Land Management said it did not meet or exceed Bureau of Land Management's estimated fair market value of the coal.

Mr Larry Claypool acting deputy state director for minerals and lands said that “Bureau of Land Management received only one bid for the tract and after reviewing the bid, we determined that it could not be accepted because it did not meet the estimated fair market value.”

In October, Bureau of Land Management rejected Cordero’s bid of USD 21 million for the North Maysdorf Tract. In November, it rejected the Rio Tinto subsidiary’s bid of USD 122 million for the larger South Maysdorf Tract, which contains an estimated 288 million tons of coal. In both instances, Bureau of Land Management said the bids did not meet fair market value.