Cloud Peak Energy Inc. CLD, one of the largest U.S. coal producers and
the only pure-play Powder River Basin (PRB) coal company, and Ambre Energy
Limited, an Australian and U.S. thermal coal mining and export company, today
announced that on August 29, 2014, their companies entered into an agreement
for Ambre Energy to purchase Cloud Peak Energy's 50% interest in the Decker
mine in Montana and related assets and assume all reclamation and other
liabilities, giving Ambre Energy 100% ownership of the Decker mine. Upon
completing the deal, Ambre Energy would fully replace Cloud Peak Energy's
approximately $66.7 million in outstanding reclamation and lease bonds for the
Decker mine.
The closing of the transaction is currently anticipated to occur during 2014
and is subject to the satisfaction of various terms and conditions.
Upon completion of the transaction, Ambre Energy will also grant Cloud Peak
Energy an option for up to 7 million metric tonnes per year of its throughput
capacity at the proposed Millennium Bulk Terminals coal export facility. The
proposed new coal export facility at Millennium Bulk Terminals, which is owned
62% by Ambre Energy and 38% by Arch Coal, is currently in the permitting
stage. It is being developed in two stages. The first stage is planned to have
capacity of 25 million metric tonnes per year with the second stage taking
annual capacity to 44 million tonnes. Cloud Peak Energy's options cover up to
3 million tonnes per year of Ambre's share of the first stage and 4 million
tonnes per year of its share of the second stage. Cloud Peak Energy's
throughput capacity will have an initial term of 10 years, with four renewal
options for five-year terms.
The Decker mine is located in Montana's Big Horn County, in the northwest
Powder River Basin. Since operations began in the 1970s, Decker has produced
approximately 300 million metric tonnes of coal. It is presently sold to the
U.S. domestic market. The Decker mine is serviced by BNSF Railway and produces
approximately 3 million metric tonnes of coal each year.
Statements from Cloud Peak Energy CEO & Ambre Energy North America CEO
Colin Marshall, Cloud Peak Energy's President and Chief Executive Officer,
said, “We are pleased to have reached this agreement with Ambre Energy, which
positions both our companies to meet anticipated future growth in Asian
thermal coal demand. We look forward to completing the transaction in the near
future and, longer term, to shipping our low sulfur Spring Creek coal to Asian
markets through the Millennium Bulk Terminals facility. We wish Ambre Energy
every success with the development of the terminal and with their strategy to
develop the Decker mine.”
Everett King, Ambre Energy North America's Chief Executive Officer, said,
“This transaction is a very positive and productive outcome for both of our
companies. Decker Mine has a sizeable resource and reserve base, produces some
of the highest energy coal in the PRB and has the benefit of extensive
infrastructure, including two rail loadouts and rail connections to existing
and proposed west coast export terminals. The mine is geographically
well-positioned for Asian markets via export through the Pacific Northwest.
Taking full ownership of Decker Mine is another significant step for Ambre in
developing coal exports through the U.S. Pacific Northwest. As well as
building new port infrastructure, Ambre will now also be able to guarantee the
supply of high quality U.S. coal to customers in Korea, Japan and the Asia
Pacific region from its own mining operations.”
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