Rosebud Mine, the lone coal supplier for Colstrip Power Plant, appears to be on steadier ground, at least for now, as Westmoreland Coal Co. exits bankruptcy.
One month ago, the mine’s supply contract with the power plant seemed in doubt as Westmoreland and its first lien creditors attempted to cancel the deal. The Colorado-based mining company argued in bankruptcy court that continuing the contract would make Rosebud less appealing to a future owner.
This month, Westmoreland emerges from bankruptcy and Rosebud has a new owner, Westmoreland Mining LLC, a company created by Westmoreland’s first lien creditors. On the ground, management under the new owner remains the same. The creditors behind the Westmoreland Mining LLC remain unidentified.
Here’s what’s certain about Rosebud’s outlook for the remainder of 2019:
The mine will continue delivering coal to Colstrip Power Plant under the terms of its existing contract through the end of the year, which is when the supply terms were expected to end before Westmoreland asked for an early exit in bankruptcy filings.
One utility with a stake in Colstrip, NorthWestern Energy, indicated in court filings that the power plant would shutter this spring if the coal contract was ended early. It can take months, if not years, of permitting to burn coal from another source. Montana’s Legislature crafted a bill to decouple the power plant and mine in order to help the power plant switch to another source.
Miners represented by the International Union of Operating Engineers, local 400, will operate at Rosebud under their current labor contract through year’s end. The collective bargaining agreement was set to expire this spring.
Montana’s Department of Environmental Quality continues to work on a new permit to expand Rosebud Mine. The mine continues to be a viable business, said Kristi Ponozzo, of DEQ. As long as the cleanup bond is maintained and the permit is passed on to a viable business entity, the state will continue to work on extending the life of the coal mine with a 10-square-mile expansion.
Conservationists had warned the state in October about permitting the mine for unknown buyers. The identity of the buyers remains unknown, although the leadership for Western Mining LLC comes from existing coal companies