Coal land lease clears way for Tongue River Railroad

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ASHLAND, Mont. — Montana will lease the coal-rich Otter Creek Tracts to Arch Coal, a move that will clear the way for construction of the 106-mile Tongue River Railroad, Dow Jones Newswires have reported. Arch plans to begin extracting coal from mines on the tracts in five to seven years.

The Tongue River Railroad was originally proposed in 1981 to enable development of coal mining in the tracts, plus provide a shortcut for Wyoming coal bound for the Upper Midwest. Though it would be privately owned, BNSF Railway would operate trains over the line. It would connect to BNSF lines at Miles City, Mont., in the north, and Spring Creek Mine north of Sheridan, Wyo., in the south.

The railroad received final approval from the Surface Transportation Board in late 2007. It's expected to cost $550 million to build.
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