GCC bids for Dunn Ranch Coal Tract to expand King II coal mine life by 20 years

Houston — GCC Energy on Friday bid for the US Bureau of Land Management's competitive coal sale lease for the Dunn Ranch Coal Tract, adjacent to the producer's King II coal mine.

GCC Energy, a subsidiary of Grupo Cementos de Chihuahua based in Tijeras, New Mexico, bid over $3.4 million for the 2,462 acre tract in LaPlata County, Colorado, which was offered for sale in response to a lease-by-application submitted by GCC Energy.

The land is estimated to have about 9.54 million st of recoverable coal.

With the addition of the Dunn Ranch Coal Tract expansion, the life of the King II mine would be extended by about 20 years.

In 2019, King II produced 657,782 st, up 6.8% from 2018.

The bid is considered preliminary and will not be confirmed until the BLM sale panel determines if the bid meets or exceeds the fair value for the Dunn Ranch Tract. The BLM previously produced an environmental assessment and published a Finding of No Significant Impact and a Decision Record in October 2019.

If GCC Energy's bid is accepted by the BLM, the lease may be issued following a 30-day period during which the Department of Justice will conduct an anti-trust review of the GCC Energy's coal holdings.

If issued, GCC Energy must pay a $3/acre annual rental payment, in addition to a royalty payment of 8% of the coal produced by underground mining methods.