The 640-acre lease will allow for the development of about 9.2 million tons of recoverable coal adjacent to the existing active operation in McKinley County. Currently, the 15,000-acre project employs 340 and produces some 8 million tons per year (tpy) of coal.

The mine is operated by Peabody subsidiary, Peabody Natural Resources Co., which purchased the lease in Q3 2013 in a BLM lease auction. Peabody initially submitted a 2011 request for the lease.

All BLM coal leases are subject to an annual rental fee of $3 per acre, and a 12.5% royalty payment for developed coal. Federal and state government officials split the royalty payments equally.