Westmoreland Coal (NasdaqGM: WLB) said May 1 that its Westmoreland Kemmerer Inc. subsidiary entered into a six-year collective bargaining agreement with represented employees at the newly-acquired Kemmerer strip mine in Lincoln County, Wyo.
The new agreement with the United Mine Workers of America (UMWA) union is effective May 1, 2012, and will expire April 30, 2018.
“We are very pleased that we were able to cooperatively enter into this long-term agreement with the UMWA in such a short time after taking ownership of the mine. This new agreement provides us certainty to continue to serve the needs of our customer base,” stated Keith Alessi, Westmoreland CEO. “We would also like to thank the leadership and membership of the UMWA for how collaborative they were in moving through this process.”
Mike Dalpiaz, UMWA International District 22 Vice President, said: “Westmoreland has just acquired the mine, and I commend the company’s willingness to set a new and refreshing tone for a lasting relationship at that mine. The membership clearly does too, as they have overwhelmingly ratified the agreement.”
Westmoreland announced Jan. 31 the completion of the acquisition of Chevron Mining Inc.’s Kemmerer mine. This sale completed Chevron Mining’s exit from the U.S. coal mining business, following the 2011 sale of its North River longwall mine in Alabama to Walter Energy (NYSE: WLT). Chevron Mining is a unit of oil giant Chevron Corp. (NYSE: CVX).
Over the last five years, Kemmerer has produced, on average, 4.8 million tons of high-quality sub-bituminous coal for sale to the adjacent Naughton power station, as well as various industrial customers located in the region. The mine purchase transaction included about 118 million tons of coal reserves as of the end of 2011. Substantially all of Kemmerer’s projected production for 2012 through 2016 is committed and priced under existing sales contracts.
Naughton is a three-unit plant with a total generating capability of about 700 MW that is operated by PacifiCorp. One of three coal-fired units at Naughton, the 330-MW Unit 3, could be switched to natural gas to meet various clean-air needs. PacifiCorp is before the Wyoming Public Service Commission seeking approval of a certificate of public convenience and necessity covering upgraded and new emissions controls on Unit 3. But recent analysis now shows that the most cost-effective control option for Unit 3 is to switch it to burning natural gas. There are no plans to fuel switch the 210-MW Unit 2 and 160-MW Unit 1 at Naughton. Units 1 and 2 have gotten recent installations of new SO2 scrubbers.