Thursday April 24, 2014


Survey results are meant for general information only, and are not based on recognised statistical methods.

Mines sold to Westmoreland Coal


Mines sold to Westmoreland Coal Sherritt International has announced that it is divesting its coal business in a pair of transactions worth a total of $946 million. The Westmoreland Coal Company will acquire Sherritt's operating coal assets in the Prairie and Mountain regions for a total of $465 million. Westmoreland will pay $312 million in cash, and assume capital leases presently valued at $153 million Westmoreland’s acquisition includes Sherritt Coal’s mines in the Estevan and Bienfait areas, along with the mine in Coronach and four mines in Alberta. There is also a 50 per cent interest in an activated carbon plant and a char production facility, both of which are located outside of Bienfait. “This is a historic event for Westmoreland,” said executive chairman Keith Alessi. “The acquisition of Sherritt’s coal operations represents a transformational opportunity to acquire seven producing coal mines, which are highly complementary to our existing operations and expertise. “This acquisition will more than double our business. It greatly diversifies our customer base and expands our operations into Western Canada, widely considered to be one of the most attractive mining jurisdictions globally. The combined business will be the sixth largest North American coal producer, as measured by 2012 production. “Additionally, the activated carbon and char activities, although small in proportion to the coal business, represent value-added product streams and provide an expansion in the industrial environmental market and entrance into the consumer market. We hope to expand these relationships.” The transaction gives Westmoreland control of the mining rights to approximately 654 million tonnes of coal, as of December 31, 2012. In 2012, the Prairie and Mountain operations delivered approximately 26 million tons of low-sulfur, thermal coal to domestic utilities. Annual production from Saskatchewan and Alberta will double the production at Westmoreland. The char production facility produced 130,000 tonnes of char in 2012, and it sells to barbeque briquette producers. The activated carbon plant, which will be operated in a 50/50 partnership with Cabot Corporation, produced 14,500 tons of activated carbon in 2012. Westmoreland is headquartered in Colorado. Among its existing coal mining operations is the mine in Beulah, N.D. A group led by Altius Minerals Corp., will acquire Sherritt's entire royalty portfolio and its interest in coal development assets for $481 million, subject to closing adjustments. “Today's transaction to divest the coal business is the culmination of a competitive bidding process which has extended over several months,” said Sherritt president and CEO David Pathe. “It simplifies our asset portfolio to concentrate on our core strengths, enhances our liquidity, and provides us with the opportunity to reduce our debt “We would like to extend our gratitude and appreciation to all the employees in our coal business for their dedication and the significant contributions they have made at Sherritt over the last 12 years. We know our workforce will become a highly valued part of the Westmoreland organization, sharing our complementary and uncompromising view on safety and strong emphasis on collaboration." The parties are seeking to close the coal transaction in first-quarter 2014.



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