Decker deal on ice indefinitely

THE sale of Cloud Peak Energy’s half of the Decker mine in Montana to co-owner Ambre Energy will not be completed “for the foreseeable future”.

Staff Reporter
Decker deal on ice indefinitely

The companies made the announcement in a joint statement on Wednesday, also reporting that they had jointly dismissed the surrounding litigation to allow time for ongoing discussions between the two.

Initially announced in December 2012, the transaction would have seen Ambre purchase Cloud Peak’s 50% interest in the mine and assume all reclamation liabilities, including the replacement of Cloud Peak’s approximate $70.7 million in outstanding reclamation and lease bonds for the mine.

Under the terms of the deal, Ambre would also make a future cash payment to Cloud Peak and grant it an option for up to 5 million tons per annum of its throughput capacity at the proposed Millennium Bulk Terminals coal export facility.

Cloud Peak previously announced in late July that the closure of the deal depended on Ambre’s ability to replace its outstanding reclamation and lease bonds.

The $57 million deal would have seen Ambre take 100% control of the Decker mine.

It was initially set to be completed on April 1 but was postponed to May 10, then July 12 and finally to August 30.

The dispute over the acquisition was being heard in the US District Court of Montana.

In December 2012, other agreements were made between the companies that, in a Securities and Exchange Commission filing Wednesday, Cloud Peak said had been completed.

The other agreements were intended to facilitate mining at Decker and at Cloud Peak’s adjacent Spring Creek mine and Youngs Creek development project.

“The mutual overstrip and ambient air quality cooperation agreements facilitate each mine’s development of coal along the mines’ mutual boundaries,” Cloud Peak said.

“Overstrip lands allow each company to access their leased coal within designated areas for a variety of customary surface mining and incidental activities.

“Access for water pipelines and monitoring was also agreed.”

Land transfers and grants of rail easements that will improve Cloud Peak’s potential rail access to the Youngs Creek project were also completed.

The once large-scale Decker has produced more than 10Mtpa previously but is currently producing at 3Mtpa.


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