The customer’s contract accounted for approximately 30% of production for 2010 and the majority of the production for 2011 and 2012. The arrangement is mutually beneficial to both the utility and the Decker joint venture as it allows the utility to avoid purchasing coal it no longer requires, and Decker to pursue favorable sales opportunities, said Cloud Peak Energy, a 50% partner in Decker Coal.
Decker Coal currently holds no firm sales contracts beyond 2011, but continues to seek market opportunities for the approximately 42 million tons of non-reserve coal held by the company.
This arrangement provides financial compensation for the remaining tons under this contract and allows the Decker joint venture to manage the ongoing mining operation. The transaction will be effective and reflected in fiscal year 2009.
