Premier Scott Moe says the provincial government has not had any discussions with the Westmoreland Coal Company about purchasing Westmoreland’s Saskatchewan operations, after the coal business filed for Chapter 11 bankruptcy in the U.S.
Moe was in Estevan on Saturday for Saskatchewan Party regional meetings, and answered questions from the media in between the meetings and a social that night.
The premier said the province has a good working relationship with Westmoreland Coal. The government works with them if there are difficulties that affect the Saskatchewan operations.
But the province also needs that coal supply if it is to provide electricity to Saskatchewan residents and businesses.
“We will engage if there are any challenges with supplying that in the future,” said Moe.
The province hasn’t had discussions on the potential for SaskPower to take over the mines. Westmoreland has indicated the Chapter 11 won’t impact their Canadian operation, and that’s the attitude the province is taking.
Moe also didn’t have information on how much money the provincial government receives through coal royalties each year.
“Whether the royalties are paid or not, the fact of the matter is power is used by the people of the province. It’s their coal, and it’s ultimately used by us. The power that is generated from that coal is used by the very same people that own that coal. That is how the Crown corporation or the Crown utility works in this case.”
Coal-fired power is growing in many countries around the world, and Moe views carbon capture and storage is an option to reduce emissions while using coal-fired power.
Westmoreland announced on Oct. 9 that it had filed for Chapter 11 bankruptcy in the U.S. and it has entered into a restructuring support agreement (RSA) with members of an ad hoc group of lenders that hold approximately 76.1 per cent of its term loan, approximately 57.9 per cent of its senior secured notes, and approximately 79.1 per cent of its bridge loan.
In addition, Westmoreland affiliate Westmoreland Resource Partners (WMLP) simultaneously filed for relief under chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.
WMLP has agreed to terms with its secured creditors on the use of cash collateral to fund WMLP’s normal course operations and allow WMLP to serve its customers during the course of WMLP’s chapter 11 case.
WMLP intends to continue working constructively with an ad hoc group of its secured lenders in connection with a value-maximizing sale and marketing process that began prior to the commencement of WMLP’s chapter 11 case.
Westmoreland’s Canadian entities and Westmoreland Risk Management, Inc. are excluded from the voluntary petitions. Westmoreland’s operations in Canada and the U.S. are cash flow positive and liquidity from operations combined with the company’s debtor-in-possession financing is sufficient to continue operating its mines in the normal course of business, without any expected impact to current output levels.
Westmoreland anticipates no staff reductions in Canada or the U.S. as a result of the restructuring announcement.
