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The company said the buyer was Montana-Dakota Utilities and the deal amended an already existing lignite supply agreement between the two.
The deal runs through December 31, 2017, during which Savage will continue to supply Lewis & Clark Station, its primary customer.
The supply rate has historically been about 300,000 tons annually.
Financial terms of the agreement were not disclosed.
Montana-Dakota Utilities is a division of MDU Resources Group.
The 874-acre Westmoreland Savage single pit surface complex produces approximately 350,000t of lignite annually. It first started producing in 1958.
Westmoreland Coal is the nation’s oldest independent coal company.
It has operations in the Powder River Basin of Montana, sub-bituminous mining interests in Wyoming and lignite mining operations in Montana, North Dakota and Texas.
