Cloud Peak Sells Stake In Export Mine
Wyoming’s largest coal company is selling its stake in a Montana mine for less than its original asking price. In a deal announced Thursday, Cloud Peak will give up its 50 percent ownership of the Decker coal mine in exchange for Ambre Energy taking on $67 million in reclamation and lease bonding. The deal also promises Cloud Peak capacity at Ambre Energy’s proposed Millennium Bulk coal export terminal in Washington state.
Sale of the mine has been in the works for several years. Cloud Peak had originally asked for around $60 million for the mine in addition to the reclamation bonding. Spokesman Rick Curtsinger says the coal market’s recent downturn is reflected in the final selling price.
“We believe that we’re near the bottom of a cyclical cycle, and that that will come back, but at this time certainly markets are down from where they were over the last two or three years during which this agreement has been negotiated,” Curtsinger said.
The Decker mine has been losing money in recent years, but Ambre Energy spokeswoman Liz Fuller says the mine has good quality coal and is well-positioned for exports through the Pacific Northwest. Exporting significant quantities of coal from the mine is dependent on approval of Ambre's proposed export terminals. One of them, in Oregon, was denied a key permit earlier this month. Cloud Peak spokesman Rick Curtsinger says there’s no contingency in the agreement for what will happen if the project in Washington isn’t permitted.
“We continue to see them as very viable projects and believe that they will move forward,” he said.
Markets didn't react strongly to the news of sale. Cloud Peak’s stock price ticked upward slightly, but quickly fell.