Lawsuit clouds Ambre Energy's coal export plans

Australian firm seeks two terminals on Columbia River




Local angle

Ambre Energy’s Morrow Pacific plan involves hauling 8 million tons of coal annually from the Port of Morrow to the Port of St. Helens, where it would be loaded onto vessels headed for Asia.

The plan calls for hauling coal on covered barges from the Port of Morrow near Boardman, Ore., 190 miles down the Columbia River to the St. Helens port in Oregon.

Vancouver-based Tidewater Barge Lines Inc., an 80-year-old operator of barges and tugboats, has said it expects to be chosen for the Morrow Pacific plan. If it works out, Tidewater would deploy its tugs to guide coal-filled barges between the Morrow and St. Helens ports. It would build as many as nine new boats to do the work, and add as many as 90 workers to its staff. Tidewater now employs 235 people.

PORTLAND — Ambre Energy, the Australian company shooting for two coal export terminals along the Columbia River, is in hot water with its business partner in a Montana mine that's supposed to supply the coal Ambre would ship to Asia.

Last week, Cloud Peak Energy sued Ambre in U.S. District Court in Montana, alleging that Ambre's export plans for the Decker mine were developed without Cloud Peak's approval and asking the court to remove Ambre as the mine's manager.

Since buying a half-share in the mine last November, Ambre has engaged in "various self-dealing transactions" designed to give Ambre a "disproportionate share" of profits on Asian sales, the complaint says.

Ambre is pursuing two export terminals along the Columbia, the Millennium Bulk Terminal in Longview and a Morrow Pacific project spread between the Port of Morrow and the Port of St. Helens.

The Morrow Pacific project is on the fastest track. The company hopes to open it next year — it would be the first Northwest coal terminal among six proposed in Oregon and Washington. There are no U.S. terminals south of Canada now.

Ambre signed a deal in April with two South Korean utilities to supply 4.4 million tons a year, if it can win permits for the Morrow Pacific project. Its releases cite the southeastern Montana mine as a source.

But Cloud Peak planned to close and reclaim the Decker mine after 2013, the complaint says, noting that the mine lost $21.1 million in 2011. Ambre has pursued continued mining to fulfill its export plans without approval from Cloud Peak, the company says.

In a press release issued Monday, Ambre called Cloud Peak's claims "unfounded." Ambre noted that Cloud Peak, a big player in Montana and Wyoming's Powder River Basin, is a competitor as well as a business partner.

Cloud Peak owns the Spring Creek mine next door to Decker and announced earlier this month that it purchased another nearby mine, part of acquisitions designed to "position Cloud Peak Energy well for future growth in our Asian exports."

Ambre said its plans will "dramatically" increase production at the Decker mine, adding jobs and tapping 152 million tons of remaining reserves.

In the lawsuit, Cloud Peak also raised questions about Ambre's "financial instability." Ambre's auditor reported a $23 million loss in December and issued a "going concern" opinion saying Ambre needed more capital to survive.

Ambre says it has since received more than $100 million in loans and capital.