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WESTMORELAND COAL COMPANY
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Westmoreland To Acquire
Knife River Corporation
Coal Operations
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Colorado Springs, CO - September 28, 2000 -- Westmoreland Coal Company (AMEX:
WLB) and Knife River Corporation, a subsidiary of MDU Resources Group, Inc.
(NYSE: MDU) announced today that Westmoreland has agreed to acquire Knife River
Corporations' coal operations for $28.8 million in cash, excluding final
settlement cost adjustments, and other consideration. Closing of the transaction
is expected to occur by year-end and is subject to board approval and other
contingencies.
Included in the sale are active coal mines in North Dakota and Montana, coal
sales agreements, reserves, mining equipment and certain rights to the inactive
Gascoyne Mine in North Dakota. The operations produce approximately 3 million
tons of coal annually. Current Knife River coal mining management and employees
at the Beulah, North Dakota and Savage, Montana locations will join
Westmoreland.
The Beulah Mine near Beulah, ND supplies lignite under long-term contracts to
the nearby 427 MW Coyote Generating Station operated by Otter Tail Power and the
100 MW Heskett Station, located near Mandan, ND approximately 74 miles from the
mine, owned by Knife River affiliate, Montana-Dakota Utilities ("MDU"). The
Savage Mine located near Sidney, MT supplies the 50 MW Lewis & Clark Station
owned by MDU and an industrial facility owned by Holly Sugar near Sidney, MT.
Christopher K. Seglem, Westmoreland Coal Company's Chairman, President and CEO
said, "This agreement reflects the on-going implementation of the strategic plan
we outlined to our shareholders in April. We look forward to long, productive
relationships with our employees and our customers, the local and regional
coal-fired generating plants and industrial customers supplied by these mines.
We also look forward to supporting the lignite industry and communities where
our operations are located. We see a bright future for low cost, environmentally
sound coal-fired energy production in this region and we believe we are
positioned well for future growth and development. We believe these coal
operations represent both immediate value to our shareholders and strategic
opportunities for the future."
"Knife River's coal mining roots go back to the early 1900s, so making the
decision to sell our coal operations was not easy," stated Terry D. Hildestad,
President and Chief Executive Officer of Knife River. "However, with Knife
River's growing construction materials operations providing over 90 percent of
Knife River's revenues and earnings, it is prudent to concentrate on the
construction materials operations and take advantage of Westmoreland's interest
in our coal operations. With a primary focus on coal operations, Westmoreland is
in a position to enhance the long-term viability of the coal mines. We are
pleased that we were able to come to agreement on a deal that is beneficial to
the employees of the mines as well as to the stockholders of both MDU Resources
and Westmoreland."
Westmoreland Coal Company, headquartered in Colorado Springs, is the oldest
independent coal company in the United States. It is implementing a strategic
plan for expansion and growth through the acquisition and development of
opportunities in the changing energy marketplace. The Company recently announced
reaching an agreement to acquire Montana Power's coal business including
operations in Montana and Texas. The Company's existing operations include
Powder River Basin coal mining through its 80%-owned subsidiary Westmoreland
Resources, Inc. and independent power production through its wholly owned
subsidiary Westmoreland Energy, Inc. The Company also holds a 20% interest in
Dominion Terminal Associates, a coal shipping and terminal facility in Newport
News, Virginia.
Knife River Corporation, headquartered in Bismarck, North Dakota, mines and
markets aggregates and related value-added construction materials, products and
services in the western United States, including Alaska and Hawaii, and also
currently operates the Beulah, ND and Savage, MT lignite mines. Knife River is a
subsidiary of MDU Resources Group, Inc. MDU Resources provides energy,
value-added natural resource products and related services that are essential to
our country's energy, transportation and communication infrastructure.
As to Westmoreland Coal Company: Certain statements in this press
release which are not historical facts or information are
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements. For
example, words such as "may," "will," "should," "estimates,"
"predicts," "potential," "continue," "strategy," "believes,"
"anticipates," "plans," "expects," "intends," and similar expressions
are intended to identify forward-looking statements. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
levels of activity, performance or achievements of the Westmoreland
Coal Company, or industry results, to be materially different from any
future results, levels of activity, performance or achievements
expressed or implied by such forward-looking statements. Such factors
include, among others, the following: general economic and business
conditions; the ability of the Company to implement its business
strategy; the Company's access to financing; the Company's ability to
successfully identify new business opportunities; the Company's
ability to achieve anticipated cost savings and profitability targets;
changes in the industry; competition; the Company's ability to utilize
its tax net operating losses; the ability to reinvest excess cash at
an acceptable rate of return; weather conditions; the availability of
transportation; price of alternative fuels; costs of coal produced by
other countries; demand for electricity; the effect of regulatory and
legal proceedings and other factors discussed in Item 1 of
Westmoreland Coal Company's Form 10-K for the year ended December 31,
1999. As a result of the foregoing and other factors, no assurance can
be given as to the future results and achievement of the Company.
Neither the Company nor any other person assumes responsibility for
the accuracy and completeness of these statements.
# # #
Westmoreland Coal Company Contact: Diane Jones (719)442-2600
Knife River Corporation Contact: Cathi Christopherson
MDU Resources Group, Inc.
(701)222-7959
