Westmoreland Coal Company, the Colorado-based owner of three coal mines in Montana, filed for Chapter 11 bankruptcy protection in federal court on Tuesday.
Westmoreland owns the Rosebud Mine, which supplies Colstrip's power plants, the Absaloka Mine, on the Crow Indian Reservation, and a third, smaller mine near the North Dakota border.
Company officials say the filing is part of a restructuring agreement with an unnamed group of lenders to deal with steep debt and declining world demand.
In Montana, demand for coal from the Rosebud mine is expected to drop when two of the four units of the Colstrip power plant cease operations by 2022. The Absaloka mine has already seen demand drop.
Company officials say operations won't be interrupted and there are no expected staff reductions.
Court filings show the company has $770 million in assets and $1.4 billion in debt. Westmoreland is one of the oldest coal companies in the U.S. with coal mines operating in six states.