Coal

Westmoreland Power to join Montana-Dakota Utilities’ application for LV-21 power project

COLORADO SPRINGS, Colo., April 26, 2001 — Westmoreland Coal Company’s subsidiary Westmoreland Power and Montana-Dakota Utilities Co. have entered into an agreement to seek a definitive joint venture development agreement for a 500MW power project at the inactive Gascoyne mine site in southwest North Dakota.

Westmoreland Power will join MDU’s application to the Lignite Energy Council and the North Dakota Industrial Commission for approval and funding for the development in conjunction with Lignite Vision 21. Westmoreland Power’s separate application will remain open pending completion of the Project Agreement.

LV-21 is a partnership between the State of North Dakota and the Lignite Energy Council designed to encourage construction of a new baseload power plant in North Dakota and includes up to $10 million in matching funds for such development. The Lignite Energy Council has expressed support for a cooperative agreement between Westmoreland Power and MDU who believe that Gascoyne is a particularly attractive site for a power project.

Westmoreland Coal Company’s subsidiary, Westmoreland Mining LLC, is acquiring the coal assets of Knife River Corp. (also a subsidiary of MDU Resources Group, Inc.). Westmoreland’s power development subsidiary will acquire certain rights at the inactive Gascoyne Mine. The Knife River Corp. closing is expected to be announced shortly.

“The combined team of Westmoreland and MDU can provide a wealth of coal and power development and operations experience to the development of LV-21,” said Christopher K. Seglem, Westmoreland Coal Company’s Chairman, President and CEO. “We appreciate the support of the Lignite Energy Council and the collaboration of MDU on a joint effort to obtain available funding to determine the feasibility of this project which we believe will help serve growing energy needs in North Dakota and surrounding markets,” he said.

Westmoreland Coal Company, headquartered in Colorado Springs, is the oldest independent coal company in the United States.

The company’s coal operations include Powder River Basin coal mining through its 80%-owned subsidiary, Westmoreland Resources, Inc., and operations in Montana, Texas and North Dakota being acquired from Montana Power Company and Knife River Corporation through its wholly owned subsidiary Westmoreland Mining LLC. The Company also has interests in four operating independent power projects held by its wholly owned subsidiary, Westmoreland Energy, Inc. and holds a 20% interest in Dominion Terminal Associates, a coal shipping and terminal facility in Newport News, Virginia. Westmoreland is implementing a growth strategy dedicated to meeting America’s dual goals of low-cost power and a clean environment through the acquisition and development of complementary, niche opportunities in coal, power and other segments of the energy sector.

MDU Resources Group, Inc. provides energy, value-added natural resource products and related services that are essential to our country’s energy, transportation and communication infrastructure. MDU Resources includes electric and natural gas utilities, a natural gas pipeline, utility services, natural gas and oil production, construction materials and mining, and energy services. For more information about MDU Resources, see the company’s web site at www.mdu.com.