Company bids less than a penny per ton in biggest US coal sale in over a decade

Core Points - A Navajo tribe-owned company, Navajo Transitional Energy Co. (NTEC), has bid $186,000 to lease 167 million tons of coal on federal lands in southeastern Montana, marking the largest U.S. coal sale in over a decade [1][2] - The bid translates to one-tenth of a penny per ton, reflecting the declining value of coal despite political efforts to increase coal mining and usage [1][4] - The lease is located in the Powder River Basin, the most productive coal fields in the U.S., but demand for the coal is uncertain as five power plants using coal from NTEC's Spring Creek mine are expected to cease operations in the next decade [3][4] Industry Context - The last successful government lease sale in the region saw Peabody Energy's subsidiary pay $793 million, or $1.10 per ton, for 721 million tons of coal in Wyoming, highlighting the stark contrast in coal pricing [2] - The Biden administration had previously banned coal sales from the Powder River Basin due to climate change concerns, but there are efforts from Republicans to reverse this decision [4] - The coal market is projected to decline significantly over the next two decades as utilities shift towards natural gas and renewable energy sources, which has led to many coal plants being retired [4][6] Economic Implications - NTEC's bid of $147 per acre for 1,262 acres indicates a low market value for coal in the area, supported by government studies [5] - Despite the ongoing sales, experts suggest that selling new coal leases does not guarantee that the tracts will be mined, as the construction of new coal plants is deemed unlikely [6][7] - The current political climate, including President Trump's push for increased coal mining, may not translate into actual mining activity due to market dynamics and environmental considerations [7]