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Canadian Pacific sidetracks plan for Powder Basin extension, takes writedown

CALGARY – Canadian Pacific Railway Ltd. (TSX:CP) is shunting aside plans to extend its network into a coal producing region of the western United States.

The Calgary-based company announced Monday it will take a $180-million non-cash charge on its books as a result of a decision to defer the plan indefinitely.

The company says it has made the decision based on a deterioration in the market for thermal coal, which is primarily burned to produce power.

CP acquired the option to build a 420-kilometre extension to serve coal mines in the Powder River Basin, which underlies parts of Montana and Wyoming.

Canadian Pacific acquired the option when it bought the Dakota Minnesota & Eastern railroad in 2007.