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Canadian Pacific to write-down Powder River Basin option

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

The Calgary-based rail operator 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.

Quick facts: Canadian Pacific Railway

Price: 354.74 CAD

TSX:CP
Market: TSX
Market Cap: $48.11 billion
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