SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  SCHEDULE 14A


           Proxy Statement Pursuant to Section 14(a) of the Securities
                    Exchange Act of 1934 (Amendment No. ____)


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                            WESTMORELAND COAL COMPANY
                            -------------------------
                (Name of Registrant as Specified In Its Charter)


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                            ------------------------
                                Agreement Reached
                            In ROVA Contract Dispute
                            ------------------------


Colorado  Springs,  CO - September  25, 2000 -  Westmoreland-LG&E  Partners  and
Dominion  Virginia  Power reported today that an agreement to settle the Roanoke
Valley  Independent  Power  facility  ("ROVA") Unit 1 Forced Outage Day contract
dispute has been reached for cash and other  considerations.  The  settlement is
subject  to  certain  conditions,   including  mutually   acceptable   completed
documentation of a revised and mutually  beneficial Power Purchase and Operating
Agreement and consent of project  lenders.  Further  details of the  anticipated
settlement are not being made available at this time.

"The ROVA Forced Outage Day situation was  challenging  and  frustrating for all
parties  involved,  but we are glad that we  continued to pursue the matter to a
positive  end  for  everyone,"  commented  W.  Michael  Lepchitz,  President  of
Westmoreland  Energy,  Inc.,  a wholly owned  subsidiary  of  Westmoreland  Coal
Company.  "The ROVA project has been and continues to be a flagship of our power
projects  and  revised  power  sales  contract  provisions  as a  result  of the
settlement will now allow for long-awaited  operational flexibility and improved
availability."

Christopher K. Seglem, Chairman,  President and CEO of Westmoreland Coal Company
added, "We are pleased to have reached a negotiated  settlement with LG&E Power,
Inc. and Dominion Virginia Power which we believe is advantageous to all parties
both  now  and  in  the  future.  Westmoreland  looks  forward  to a  new,  more
constructive  relationship  with these parties and to the  contribution  of this
transaction  to the  implementation  of  the  strategic  plan  we  presented  to
shareholders in April."

ROVA  was  developed  and is owned by the  Westmoreland-LG&E  Partners,  a 50/50
partnership  between   Westmoreland  Coal  Company's   (AMEX:WLB)  wholly  owned
subsidiary,  Westmoreland  Energy,  Inc.  and LG&E Power  Inc.,  a wholly  owned
subsidiary  of LG&E  Energy  Corp.  (NYSE:LGE).  Dominion  Virginia  Power is an
affiliate of Dominion (NYSE:D).

Westmoreland Coal Company,  headquartered in Colorado Springs, is implementing a
strategic plan for expansion and growth through the  acquisition and development
of  opportunities  in the  changing  energy  marketplace.  The Company  recently
announced reaching an agreement to acquire Montana Power's coal business as well
as exclusive  negotiations  for the  acquisition  of the coal  business of Knife
River  Corporation,  an affiliate of  Montana-Dakota  Utilities.  The  Company's
existing operations include Powder River Basin coal mining through its 80%-owned
subsidiary Westmoreland Resources, Inc. and independent power production through
its wholly owned subsidiary  Westmoreland  Energy, Inc. The Company also holds a
20%  interest in Dominion  Terminal  Associates,  a coal  shipping  and terminal
facility in Newport News, Virginia.

     As to  Westmoreland  Coal  Company:  Certain  statements in this press
     release   which  are  not   historical   facts  or   information   are
     "forward-looking  statements" within the meaning of Section 27A of the
     Securities Act of 1933 and Section 21E of the Securities  Exchange Act
     of 1934.  Any statements  contained  herein that are not statements of
     historical fact may be deemed to be  forward-looking  statements.  For
     example,   words  such  as  "may,"  "will,"   "should,"   "estimates,"
     "predicts,"    "potential,"    "continue,"   "strategy,"   "believes,"
     "anticipates,"  "plans," "expects," "intends," and similar expressions
     are   intended   to   identify   forward-looking    statements.   Such
     forward-looking   statements   involve   known  and   unknown   risks,
     uncertainties  and other factors  which may cause the actual  results,
     levels of activity,  performance or achievements  of the  Westmoreland
     Coal Company, or industry results, to be materially different from any
     future  results,  levels  of  activity,  performance  or  achievements
     expressed or implied by such forward-looking  statements. Such factors
     include,  among others,  the following:  general economic and business
     conditions;  the  ability of the  Company to  implement  its  business
     strategy; the Company's access to financing;  the Company's ability to
     successfully  identify  new  business  opportunities;   the  Company's
     ability to achieve anticipated cost savings and profitability targets;
     changes in the industry; competition; the Company's ability to utilize
     its tax net operating  losses;  the ability to reinvest excess cash at
     an acceptable rate of return; weather conditions;  the availability of
     transportation;  price of alternative fuels; costs of coal produced by
     other countries; demand for electricity;  the effect of regulatory and
     legal   proceedings   and  other  factors   discussed  in  Item  1  of
     Westmoreland  Coal Company's Form 10-K for the year ended December 31,
     1999. As a result of the foregoing and other factors, no assurance can
     be given as to the future  results  and  achievement  of the  Company.
     Neither the Company nor any other person  assumes  responsibility  for
     the accuracy and completeness of these statements.


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           For further information contact Diane Jones (719) 442-2600.