ABSALOKA MINE, MONTANA

Absaloka Coal, LLC (ACL) was formed in 2008 to be a qualified producer of Indian coal under Section 45(e) of the U.S. Internal Revenue Code. Westmoreland subleased a certain amount of coal reserves to ACL and agreed to serve as contract mine operator on behalf of ACL, thereby establishing ACL as the producer and seller of coal from the Absaloka Mine.

Westmoreland sold its membership interest in ACL to a large financial entity in October 2008 in exchange for certain equity payments that include notes for most of the value of Indian Coal Production Tax Credits earned by ACL. A portion of these note payments are shared with the Crow Tribe. ACL has received a Private Letter Ruling from the Internal Revenue Service with regard to its qualification for the credits.