"Our third quarter would have been profitable had we been able to recognise as revenue certain new agreed upon amounts for tons previously shipped from the Jewett Mine and had we not taken contingent charges in the third quarter for unresolved disputed tax obligations,” said Westmoreland chief Christopher K Seglem.
Earnings were depressed by two disputed tax claims and a planned maintenance outage at the ROVA power plant project in which Westmoreland holds an interest.
Higher commodity, administrative and depreciation, depletion, and amortisation costs in coal operations were partially offset by an increase in tons sold and higher sales prices. Coal sales increased 23% to $US78.5 million.
Operating income for the coal segment was $US5.4 million compared with $US6.4 million in 2004, while coal revenues were up 20% to $US94.4 million for the third quarter compared with $US78.8 million.
The company sold 8 million tons, with all mines except the Savage Mine increasing both tons sold and revenues. The company produced 29Mt in 2004 and is on track for anticipated record production of 30Mt this year.
Operating income for the independent power segment was $US1.2 million with the ROVA project producing 381,000MW-hours for the quarter.
The Colorado Springs-based company operates four mines: the Rosebud, Jewett, Absaloka and Savage mines. All of these operations maintained their lost-time accident free record for the past nine months compared to 2.06 for the same period of 2004.
Looking ahead, the company sees significant opportunities particularly in the Western United States for both the development of new power projects and the exploitation of currently controlled but untapped coal reserves in Montana and North Dakota.
"I believe the need for new baseload coal-fired power is increasingly evident to our citizens and political leaders,” Seglem said.
“The US Department of Energy's database, which tracks new coal-fired plants, reports 129 new projects under consideration.”
Westmoreland Coal Company's coal operations include Powder River Basin coal mining in Montana and lignite mining operations in Montana, North Dakota and Texas. Power operations include ownership interests in two coal-fired generating plants and one natural-gas fired plant.