(Reuters) -The Trump administration will auction off coal leases on federal lands in four U.S. states in the coming days, a key test of mining industry interest in its efforts to revive a sector in decline.
The sales in Alabama, Montana, Utah and Wyoming will be the first since President Donald Trump’s administration rolled out measures to support the coal industry with increased access to federal lands and hundreds of millions of dollars for more coal-fired power plants.
U.S. coal production dropped
40% between 2013 and 2023, according to the Energy Information Administration, due to stepped-up environmental regulation and competition from natural gas. During the same period, federal acreage under lease for coal mining fell 11%.
Former President Joe Biden's administration stopped issuing new coal leases on federal lands. Trump has vowed to revive the program so coal can fuel more of the nation's soaring electricity demand tied to artificial intelligence.
If leases are issued, companies will pay a 7% royalty rate to the federal government, down from either 12.5% or 8% prior to passage of Trump's tax law earlier this year.
The National Mining Association, an industry trade group, said the sales were expected to attract significant interest.
"With energy needs only accelerating, and an administration in place that properly values reliable, affordable fuel sources, American coal producers are well positioned to make the most of new leasing opportunities to answer the call for increased domestic coal," NMA spokesperson Ashley Burke said in an email.
The competitive sales will kick off on Tuesday with the offer of two leases in Tuscaloosa County, Alabama. The leases are for the right to mine underneath 14,050 acres (5,686 hectares) of private land and are estimated to contain 53 million tons of metallurgical coal used in steelmaking.
The tracts are adjacent to two mines owned by Warrior Met Coal, which first applied to lease the additional areas in 2009.
The Interior Department's Bureau of Land Management will follow the Alabama sale with one in Utah on Wednesday. The Little Eccles Tract spans 120 acres in Emery County and holds an estimated 1.29 million tons of recoverable coal. The planned sale responds to an application by Canyon Fuel Company, which operates the adjacent Skyline Mine.
On October 6, the BLM will offer 1,262 acres in Montana with an expected 167.5 million tons of recoverable coal. Two days later it will auction 3,508 acres in Wyoming with an estimated 365 million tons of recoverable coal. The Navajo Transitional Energy Company, which is owned by the Navajo Nation, operates mines in those areas and applied to BLM to offer the leases.
Environmentalists criticized the administration's push to accelerate coal leasing amid rising concern about fossil fuels' contribution to climate change.
“What these new leases are doing is they're really only working to prop up a dying industry by locking in coal reserves that won't even be mined until we're well into the second half of the century," said Emma Yip, an attorney with the Center for Biological Diversity.
(Reporting by Nichola Groom; Editing by Lincoln Feast.)
