More signs of problems have emerged with an Australian company's bid to take over a Montana coal mine, as court documents reveal Ambre Energy has been unable to come up with more than $70 million in cash to close on the deal.
The Decker mine near the Wyoming border is co-owned by Ambre and Wyoming-based Cloud Peak Energy. Ambre wants full ownership as part of its ambitious plans to ramp up coal exports to Asia through two West Coast ports.
Decker last year was the subject of a management quarrel between its owners that led to a lawsuit in U.S. District Court. The two sides struck a tentative deal in December - shortly before about a third of the mine's workforce was laid off - but have since asked the court to extend their settlement deadline three times.
The latest request, to push back the deadline from July 12 to Aug. 30, was granted earlier this week by U.S. Magistrate Judge Carolyn Ostby. The judge indicated that this will be the final chance for the companies to work out a deal before the lawsuit proceeds to trial in September.
Cloud Peak and Ambre said in court documents that their ability to close the sale depended on "Ambre's ongoing financing efforts to obtain cash collateral." That cash is needed to cover $70.7 million in outstanding reclamation and lease bonds for the mine that are held by Cloud Peak.
Ambre spokeswoman Liz Fuller said the company is still committed to working out the details and completing the deal by the new deadline.
When a previous deadline extension was sought in May, the companies said in court documents that they were renegotiating the terms.
A group that has been closely tracking Ambre's venture into the U.S. coal export market said Ambre's troubles with Decker were not surprising given the company's shaky finances.
The Sightline Institute, a Seattle-based environmental think tank, in February released a report that revealed Ambre racked up losses of more than $124 million from 2005 through 2012. Earlier reports in Australian media said Ambre was at risk of financial collapse because a proposed mine and coal-to-liquid fuels plant it was pursuing in the country had been rejected by government officials.
"Where's a company like Ambre going to find $71 million to buy a failing mine?" asked Sightline's Clark Williams-Derry. "The real underlying indication here is Ambre's having a heck of a time finding money right now."
Ambre has been in discussions with state officials about a possible $10 million loan from the Montana Board of Investments. State officials have said no loan is possible unless the company's finances are sound.
Decker was once among the largest strip mines in the U.S., and produced more than 10 million tons of coal annually as recently as 2002. The mine is on track to extract only 1.5 million tons of coal this year, based on first quarter production figures from the U.S. Department of Labor.
Cloud Peak, one of the largest coal producers in the U.S., also is seeking land and rail easements for a new Wyoming mine in the deal with Ambre.
A Cloud Peak spokesman, Rick Curtsinger, said the company had no comment beyond statements made in documents submitted to the court.