June 25, 2018 Read More →

AEP decision another blow for struggling Westmoreland

S&P Global Market Intelligence ($):

Struggling coal miner Westmoreland Coal Co. disclosed that a major Ohio customer will stop buying its coal at the end of the year.

A subsidiary of American Electric Power Co. Inc. declined Westmoreland’s bid to supply coal to units at the generator’s Conesville power plant after the current contract expires Dec. 31. That contract represented 14% of the consolidated revenues of Westmoreland’s master limited partnership, Westmoreland Resource Partners LP.

American Electric Power spokeswoman Melissa McHenry said the company has secured another supply of coal for Conesville and is not planning to retire the plant at the end of the year.

According to S&P Global Market Intelligence fuel supply data, in the first few months of 2018 the plant primarily bought coal from Westmoreland’s Buckingham Mine No. 6 and Rice No. 7 strip mine operations. The company’s website says coal from Buckingham is shipped by rail to Conesville, and federal fuel contract data does not show deliveries from that mine to any other plant.

Buckingham produced 232,727 tons of coal in the first quarter with an average employee count of 153, according to U.S. Mine Safety and Health Administration data.

S&P Global Ratings recently downgraded Westmoreland Coal after the company entered into a forbearance agreement with senior secured debt holders, noting that a default by the master limited partnership is “a virtual certainty.”

More ($): Westmoreland loses major coal contract in Ohio

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