ST. LOUIS, March 18 /PRNewswire-FirstCall/ -- Arch Coal, Inc. (NYSE:ACI) today announced that it was the successful bidder for a state coal lease known as the Otter Creek Tracts located in southeastern Montana. Arch made a one-time bonus bid for the lease of $85.8 million, payable in April 2010. The coal lease will give Arch the right to mine approximately 8,300 acres of state-owned minerals. Arch now controls approximately 1.5 billion tons of coal in Montana's Otter Creek area, including previous reserve additions such as the coal lease secured in November 2009 through Great Northern Properties Limited.

"We view the combined Otter Creek coal reserves as a strategic platform for future growth in the Northern Powder River Basin," said Steven F. Leer, Arch's chairman and chief executive officer. "The addition of the Montana state reserves further expands and strengthens our position while affording us greater flexibility in future site development. As previously stated, we believe these Northern PRB reserves will help us competitively serve U.S. power producers, supply additional coal for export to emerging Asia or possibly house the site of a future coal-conversion facility."

St. Louis-based Arch Coal is the second largest U.S. coal producer. Through its national network of mines, Arch supplies cleaner-burning, low-sulfur coal to U.S. power producers to fuel roughly 8 percent of the nation's electricity. The company also ships coal to domestic and international steel manufacturers as well as international power producers.

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