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Arch makes play for Otter Creek

ARCH Coal subsidiary Ark Land Company has bid almost $US86 million for the Otter Creek tracts in ...

Angie Tomlinson
Arch makes play for Otter Creek

Ark made its play for the lease sale just before the March 16 deadline with a bid of $85,845,110 plus royalties (12.5% per ton) to the Montana Land Board.

The Montana Department of Natural Resources and Conservation has recommended the Land Board accept the bid, according to the St Louis Business Journal.

The Land Board is expected to make a decision on the bid in a meeting today.

The state-owned tracts contain about 533 million tons of coal in southeast Montana, near the Wyoming border.

If granted, the lease will increase Arch Coal’s foothold in the Powder River Basin after the company late last year inked a coal lease with Great Northern Properties to secure rights to 731Mt of resources in the Otter Creek tract.

Arch is planning a dragline-operated surface complex to mine the resources.

"The lease of GNP's Otter Creek reserves provides an attractive future growth opportunity for Arch to build a significant position in the northern Powder River Basin coal region," Arch chief executive officer Steven Leer said in the company’s fourth-quarter results.

"We believe future development of these Montana coal reserves will further strengthen Arch's ability to competitively serve the northern US power generation market, provide us with an additional supply source to export into the fast-growing Pacific Rim coal market and could eventually support a coal-conversion facility."

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