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Ambre Energy assumes full ownership of Decker coal mine

World Coal,

Ambre Energy has purchased Cloud Peak Energy’s 50% stake in the Decker coal mine, thereby assuming 100% ownership of the Montana mine.

Ambre Energy will assume all reclamation and other mining liabilities, and will fully replace Cloud Peak Energys approximate US$ 66.7 million in outstanding reclamation and lease bonds for the Decker mine.

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 t 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 tpa of coal.

The closing of the deal is anticipated to be completed over the remainder of 2014. Upon completion of the transaction, Ambre will also grand Cloud Peak an option of up to 7 million toa of throughput capacity at the proposed Millennium Bulk Terminals, which is owned by Ambre Energy and Arch Coal and is currently in the permitting stage.

The terminal will developed in two stages. The first stage is planned to have capacity of 25 million tpa with the second stage taking annual capacity to 44 million t. Cloud Peak Energy’s options cover up to 3 million tpa of Ambre’s share of the first stage and 4 million tpa 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.

Colin Marshall, Cloud Peak Energy’s president and CEO, 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 CEO, 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 US coal to customers in Korea, Japan and the Asia Pacific region from its own mining operations.”

Edited from various sources by Sam Dodson

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