Westmoreland Coal Co. is seeking to break two union contracts and terminate retiree benefits totaling an estimated $329 million, saying dramatic cuts to its labor costs are needed in order to sell its coal mines to lenders and avoid liquidation, WSJ Pro Bankruptcy reported. The Englewood, Colo.-based company said in court papers filed on Wednesday in the U.S. Bankruptcy Court in Houston that it hasn’t received any qualified bids for mines it attempted to auction in chapter 11 other than an existing offer from senior lenders. Now, Westmoreland intends to move forward with that offer, a transaction that requires the company to scrap collective bargaining agreements and terminate retiree benefits. Read more.
In related news deals and activist campaigns at mining companies are picking up, but it may not be enough to rekindle investor enthusiasm for the group, the Wall Street Journal reported. The value of mining deals surpassed $10 billion in September for the first time in nearly four years, then topped that threshold again in November and earlier this month, Dealogic data show. Even so, the industry continues to be plagued by tepid metals prices, battles with emerging-market governments over reserves and dwindling supplies. For investors, growth potential just doesn’t stack up relative to other industries, said Lucas Pipes, a mining analyst at B. Riley. Read more. (Subscription required.)
