Westmoreland Coal Company has completed the acquisition of Chevron Mining’s Kemmerer coal mine in Wyoming, US for $76.5m.
The company will assume approximately $118m in certain liabilities, including post retirement medical, pension, black lung, and asset retirement obligation liabilities.
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Westmoreland president and CEO Keith E Alessi said the company is happy to have completed the transaction and is looking forward to working with the customers of the Kemmerer mine.
"The Kemmerer mine is an excellent strategic acquisition for us and represents both growth and diversification for our business," Alessi said.
Westmoreland said the mine has produced an average of 4.8m tonnes over the past five years, with high-quality sub-bituminous coal for sale to the adjacent Naughton power station as well as various industrial customers located in the region.
The Kemmerer mine had about 118m tonnes of coal reserves as of 31 December 2011, enough for 20 years of production.
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By GlobalDataThe transaction includes recently installed coal preparation and load-out facilities, strong customer commitments and an expansive fleet of well maintained mining equipment.
Additionally, all of Kemmerer’s projected production for 2012 through 2016 is committed and priced under existing sales contracts.
Previously, Westmoreland and its subsidiaries announced the closing of its offering of $125m aggregate principal amount of senior secured notes due 2018 in a private placement.
The proceeds from the offering will be used initially to finance the acquisition of the Kemmerer mine, $76.5m as cash consideration for the acquisition, and approximately $24.7m for reclamation bonding collateral for the mine.
