Ambre to take 100% of contested Decker mine

AMBRE Energy will buy out partner Cloud Peak Energy’s 50% share in southeast Montana’s Decker coal mine – effectively ending a six-month dispute over the open pit’s future redevelopment and profit distribution.
Ambre to take 100% of contested Decker mine Ambre to take 100% of contested Decker mine Ambre to take 100% of contested Decker mine Ambre to take 100% of contested Decker mine Ambre to take 100% of contested Decker mine

The Decker mine, courtesy Ambre Energy.

Justin Niessner

Ambre is expected to assume 100% ownership of Decker by the first quarter of 2013.

The deal will require the miner to provide Cloud Peak with a cash payment of up to $67 million, 1200 acres of land, various infrastructure development concessions and an option to use 5 million tonnes of throughput capacity at Ambre’s planned Millennium Bulk Terminals facility in Washington state.

The 50-50 venture between Wyoming-based Cloud Peak and the American arm of Ambre was the subject of a legal battle over an expected increase in business with Asian customers and the relevance of Cloud Peak’s nearby Spring Creek mine.

Cloud Peak contended in mid-July that its Australian partner was engaging in “self-dealing transactions” as it strategized Decker’s future business arrangements with Asian utilities. Two weeks later, Ambre counter-sued on grounds that Cloud Peak’s neighboring Spring Creek mine posed a conflict of interest to the Decker JV.

The agreement for Ambre to purchase Cloud Peak’s 50% share in the mine will provide for the joint resolution and dismissal of the pending Decker litigation.

Ambre will take on all related assets and assume all reclamation liabilities.

Cloud Peak will walk away with higher potential export capacity and improved rail access to its Youngs Creek project in northern Wyoming.

“This deal should position both our companies to meet anticipated future growth in Asian thermal coal demand,” Cloud Peak president and chief executive Colin Marshall said.

“We look forward to completing the transaction over the coming months and, longer term, to shipping our low-sulfur Spring Creek coal to Asian markets through the Millennium Bulk Terminals facility.”

Ambre founder, chief executive and managing director Edek Choros said Decker produced some of the highest energy coal in the Powder River Basin and was strategically near to extensive transport infrastructure.

“Taking full ownership of Decker mine is another significant step for Ambre in developing coal exports through the US Pacific Northwest,” Choros said.

“As well as building new port infrastructure, Ambre will now also be able to guarantee the supply of high quality US coal to customers in Korea, Japan and the Asia Pacific region from its own mining operations.”

Ambre owns 62% of the Millennium Bulk Terminals facility, which is planned to have capacity of 25Mt per annum in its first stage of production and 44Mtpa capacity in its second stage.