Ambre Energy North America and its subsidiary KCP said it felt Cloud Peak had a conflict of interest in the Decker project because it owned and operated the neighboring competitor mine Spring Creek, and thus wanted Western Minerals expelled.
Ambre acquired its interest in Decker last November when it acquired KCP. It and Western Minerals are equal partners in the joint venture.
“We are asking the court to oversee the disposal of Cloud Peak's interests in Decker, AENA president and chief executive Everett King said.
The company also responses to Cloud Peak’s claims in its initial suit filed in mid-July related to KCP's management rile.
In that suit, Cloud Peak ordered the closure of the mine after 2013, claiming KCP and Ambre Energy were frustrating what Cloud Peak called a “closure plan” it said was agreed to before Ambre’s control acquisition of KCP.
“[T]here is no agreement to close the mine,” Ambre officials said.
“Decker has been in operation for 40 years and continues to be a viable mine.”
In fact, Ambre said in its counterclaim, an independent report from earlier this year estimated Decker’s coal resources to be 955 million short tons, 152 million short tons of which are proved and probable.
Also, since taking an interest in Decker late last year, Ambre’s KCP says it has increased the complex’s operational efficiency and met its supply obligations while also performing all required reclamation activities and maintaining safety and productivity.
“Instead of welcoming the increased efficiencies, Cloud Peak is complaining that Ambre is encouraging new customers to consider buying coal from Decker,” King said.
“Our approaches to potential buyers of Decker Coal have resulted in strong expressions of buying interest from current and past customers. We don't understand why this is not a good thing.”
Ambre also had much to say about Cloud Peak’s claims that it is engaging in “self-dealing transactions” set up to keep the PRB producer out of the loop on future export deals and ultimate profits.
Officials confirmed Ambre's infrastructure division is involved in the permitting and pre-construction engineering of two export projects in the Pacific Northwest, but that business was being conducted as it should.
“[A]ny coal purchased from Decker for export – by Ambre or any other company – would have to be purchased at fair market value, in order to insure appropriate royalty payments and production taxes,” the company said.
Pending the completion of those facilities, Morrow Pacific and Millennium Bulk Terminals on the Columbia River, Ambre said its international marketing division would look to western US mines to purchase coal so that it might fill existing supply agreements with Asian buyers.
“This will include a proposal to Decker for a long-term sales agreement, which will be submitted to the joint management committee for approval,” officials said.
“Ambre anticipates that this offer and other opportunities to increase sales to US domestic buyers will permit the profitable operation of Decker for many years after 2013.”
