The contract covers a period through the end of 2009 and allows the customer to purchase additional coal for an unspecified co-generation plant. California has 770 active co-generation projects, producing 17 percent of the state's electricity supply, according to Cogenworks, a coalition of private- and public-sector organizations that support efficient use of electrical resources.

America West contended it could realize an additional $4.75 million in sales if the utility seeks additional coal and the growing mine is able to optimize its production capabilities through 2009.

In July, the company announced an agreement to sell coal worth $8.3 million to an unnamed Western power agency. Then it signed a lease agreement with an option to purchase an estimated 50 million tons of coal reserves in the Book Cliffs, southeast of Sunnyside.

"This new contract, in combination with the contract we announced in July, could represent more than $32 million in revenues to our company over the next 16 months," said America West Resources chief executive Dan Baker.

He said revenue from the sales will be used to help America West develop the Columbia leasehold in the Book Cliffs.

- Mike Gorrell