SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ___________)

Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|

Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2)
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

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

(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)

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|_| Fee computed on table below per Exchange Act Rules 14(a)-6(i)(4) and 0-11.
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WESTMORELAND COAL COMPANY
14TH FLOOR--HOLLY SUGAR BUILDING
2 NORTH CASCADE AVENUE
COLORADO SPRINGS, COLORADO 80903

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO THE SHAREHOLDERS:

The annual meeting of shareholders of Westmoreland Coal Company will be
held at The Antlers Doubletree Hotel, Summit 3 Ballroom, 4 South Cascade Avenue,
Colorado Springs, Colorado, on Wednesday, June 12, 1996 at 10:00 a.m. Mountain
Daylight Time, to:

1. Elect a Board of Directors for the ensuing year;

2. Approve adoption of the 1996 Directors' Stock Option Plan; and

3. Transact such other business as may properly come before the
meeting or any adjournment thereof.

Only shareholders of record at the close of business on April 17, 1996 will
be entitled to notice of and to vote at the meeting. The proxy statement which
follows contains more detailed information as to the actions proposed to be
taken.

PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE IF
YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON.

Theodore E. Worcester
Corporate Secretary

April 26, 1996

WESTMORELAND COAL COMPANY
14TH FLOOR--HOLLY SUGAR BUILDING
2 NORTH CASCADE AVENUE
COLORADO SPRINGS, COLORADO 80903

April 26, 1996

PROXY STATEMENT

GENERAL INFORMATION

The enclosed proxy is solicited on behalf of the Board of Directors of
Westmoreland Coal Company ('Company') for use at the annual meeting of
shareholders to be held on June 12, 1996. The proxy may be revoked by a
shareholder at any time before its exercise by written notice to the Secretary
of the Company, by executing and delivering a proxy with a later date or by
voting in person at the meeting. The expense of this solicitation will be paid
by the Company. Some officers and regular employees may solicit proxies
personally and by telephone. This proxy statement and the enclosed proxy were
first sent to shareholders of the Company on or about April 26, 1996.

Shareholders of record at the close of business on April 17, 1996 ('record
date') will be entitled to vote at the meeting. On the record date, the Company
had outstanding 6,965,328 shares of common stock with a par value of $2.50 each
and 2,300,000 depositary shares (each of which represents one quarter of a share
of Series A convertible exchangeable preferred stock with a par value of $1.00
each). The common stock and the depositary shares constitute all of the
Company's voting securities. Each outstanding share will entitle the holder to
one vote on all business of the meeting.

The presence in person or by proxy of the holders of a majority of the
outstanding shares of stock of the Company entitled to vote at the meeting will
constitute a quorum. Directors are elected by the affirmative vote of a
plurality of the votes of the shares present in person or by proxy at the
meeting. In all other matters, the affirmative vote of a majority of the shares
present in person or by proxy at the meeting is required for approval.

A shareholder may, with respect to the election of directors (i) vote for
the election of all named director nominees, (ii) withhold authority to vote for
all named director nominees or (iii) vote for the election of all named director
nominees other than any nominee(s) with respect to whom the shareholder
withholds authority to vote by so indicating in the appropriate space on the
proxy. In the absence of a specific direction from the shareholder, proxies will
be voted for the election of all named director nominees.

A shareholder may, with respect to the proposal to adopt the 1996
Directors' Stock Option Plan (i) vote for approval, (ii) vote against approval
or (iii) abstain from voting on the proposal. An abstention from voting on the
proposal has the effect of a vote against adoption of the proposal. In the
absence of a specific direction from the shareholder, proxies will be voted for
the adoption of the proposal.

If a proxy indicates that all or a portion of the votes represented by the
proxy are not being voted with respect to a particular matter (a 'broker
nonvote'), that broker nonvote will have no effect on the outcome of the vote.
However, broker nonvotes and abstentions are counted for the purpose of
determining the presence of a quorum.

SHARE OWNERSHIP

Except as set forth in the following table, no person or entity known to
the Company beneficially owned more than 5% of the Company's voting securities
as of December 31, 1995:

NUMBER OF SHARES AND NATURE OF BENEFICIAL OWNERSHIP (1)
---------------------------------------------------------------------
NAME AND ADDRESS OF COMMON PERCENTAGE OF DEPOSITARY PERCENTAGE OF
BENEFICIAL OWNER STOCK COMMON STOCK SHARES DEPOSITARY SHARES
- ----------------------------------------------------------------------------------------------------------------------

Penn Virginia Equities Corporation 1,754,411(2) 25.2%
One Radnor Corporate Center
Suite 200
100 Matsonford Road
Philadelphia, PA 19087

Riverside Capital Advisers, Inc. 685,500(3) 29.8%
2320 Northeast 9th Street
Suite 300
Fort Lauderdale, FL 33304

The Killen Group, Inc. 922,558(4) 13.3%
1189 Lancaster Avenue
Berwyn, PA 19312

Alvin Hoffman 187,700(5) 8.2%
c/o Makefield Securities Corp.
6699 NW 2nd Ave. Unit 416
Boca Raton, FL 33487

(1) Based on information as of December 31, 1995 contained in filings made with
the Securities and Exchange Commission ('Commission') or furnished to the
Company by the respective shareholders. Except as indicated below, the
Company is informed that the respective beneficial owners have sole voting
power and sole investment power with respect to the shares shown opposite
their names.

(2) Penn Virginia Equities Corporation is a wholly-owned subsidiary of Penn
Virginia Corporation ('Penn Virginia'). Lennox K. Black, who will not stand
for reelection as a director of the Company, is Chairman of the Board and
Chief Executive Officer of Penn Virginia. (See 'Transactions with Other
Companies' below.)

(3) Riverside Capital Advisers, Inc. ('Riverside') reported that at December
31, 1995, it was deemed to own 685,500 depositary shares as a result of its
having sole voting power and sole dispositive power over such shares held
in thirteen customer accounts for which it provides investment advice. The
Schedule 13G filed by Riverside assumed that 1.708 shares of common stock
are issuable upon conversion of each depositary share.

(4) According to its Schedule 13G dated February 14, 1996 and filed with the
Securities and Exchange Commission, The Killen Group, Inc. ('The Killen
Group'), a registered investment advisor, reported that at December 31,
1995, it was deemed to beneficially own 922,558 shares of common stock as a
result of its having sole voting power over 494,400 shares and sole
dispositive power over 922,558 shares purchased on behalf of clients of The
Killen Group. In addition, Robert E. Killen, the President and sole
shareholder of The Killen Group, reported on the Schedule 13G dated
February 14, 1996 that he owns 35,000 shares of common stock as a personal
investment.

(5) Mr. Hoffman, a registered representative associated with Makefield
Securities Corp., reported on Schedules 13D dated May 4, 1995 and July 15,
1995 which he filed with the Securities and Exchange Commission, that he
was deemed to beneficially own 187,700 depositary shares, consisting of
57,600 shares that he holds as a personal investment and 130,100 shares
that he holds on behalf of clients in discretionary accounts. Mr. Hoffman
has sole dispositive power, but no voting power with respect to the 130,100
depositary shares.

The following table sets forth information as of February 29, 1996
concerning stock ownership of individual directors and named executive officers,
and of the executive officers and directors of the Company as a group:

NUMBER OF SHARES AND NATURE OF BENEFICIAL OWNERSHIP (1)
NAME OF DIRECTORS, --------------------------------------------------------
NAMED EXECUTIVE OFFICERS PERCENTAGE OF DEPOSITARY
AND PERSONS AS A GROUP COMMON STOCK COMMON STOCK (2) SHARES (2)
- ------------------------------------------------------ ---------------- ----------------------- -------------

Lennox K. Black 1,758,911(3)(7) 25.3% --
Brenton S. Halsey 9,693(7)(9) -- --
Pemberton Hutchinson 3,100(7) -- 3,200
William R. Klaus 7,837(7)(9) -- --
E. B. Leisenring, Jr. 41,662(7) -- --
Thomas W. Ostrander 2,181 -- --
James W. Sight 120,000 1.7% --
Christopher K. Seglem 82,243(4)(6) 1.2% 239(5)
Edwin E. Tuttle 18,773(7) -- --
Ronald W. Stucki 26,172(4)(6) -- 200(5)
Robert J. Jaeger -- -- --
Theodore E. Worcester 28,310(4)(6) -- --
R. Page Henley 36,600(4)(6)(8) -- --
Matthew S. Sakurada 5,788(4)(6) -- --
Directors and Executive Officers
of the Company as a Group 2,141,270(4)(6)(7)(8)(9) 30.7% 3,639

(1) This information is based on information furnished to the Company by
individual directors and executive officers. Except as indicated below, the
Company is informed that the respective beneficial owners have sole voting
power and sole dispositive power with respect to the shares opposite their
names.

(2) Percentages represent the percentage owned of the Company's common stock.
Percentages of less than 1% are not reflected. No individual or group
presented in the table held as much as 1% of the Company's depositary
shares.

(3) Principally represents beneficial ownership by Penn Virginia Equities
Corporation, a wholly-owned subsidiary of Penn Virginia, of 1,754,411
shares, of which Mr. Black disclaims beneficial ownership in his individual
capacity. This presentation is made solely because Mr. Black is also Penn
Virginia's Chairman of the Board and Chief Executive Officer.

(4) Includes shares held by Mellon Bank as Trustee of the Westmoreland Coal
Company and Affiliated Companies Employees' Savings/Retirement Plan vested
as follows: Mr. Seglem-5,046, Mr. Stucki-172, Mr. Henley--5,544, Mr.
Worcester-2,310 and Mr. Sakurada-2,407; shares vested in the directors and
executive officers as a group totaled 15,479.

(5) Represents shares held by Mellon Bank as Trustee of the Westmoreland Coal
Company and Affiliated Companies Employees' Savings/Retirement Plan. Shares
vested in the directors and executive officers as a group totaled 439.

(6) Includes shares which may be purchased under the 1982 and 1985 Westmoreland
Incentive Stock Option and Stock Appreciation Rights Plans as follows: Mr.
Seglem-77,197, Mr. Stucki-26,000, Mr. Henley-26,046, Mr. Worcester-26,000,
and Mr. Sakurada-3,371; shares which may be purchased under these Plans for
the group as a whole totaled 158,614.

(7) Includes shares which may be purchased under the 1991 Non-Qualified Stock
Option Plan for Non-Employee Directors as follows: Messrs. Halsey, Klaus,
Leisenring and Tuttle-6,000 each; Mr. Black-4,500; Mr. Hutchinson-1,500; in
total, 30,000.

(8) Includes 5,000 shares of restricted common stock granted to Mr. Henley
under the Westmoreland Coal Company 1995 Long-Term Incentive Stock Plan.

(9) Includes shares held under the Westmoreland Directors' Deferred
Compensation Plan as follows: Mr. Halsey-2,153 and Mr. Klaus-1,837; 3,990
in total, which may not be voted.

ELECTION OF DIRECTORS

NOMINEES FOR ELECTION TO BOARD OF DIRECTORS

The six persons named in the following table, all of whom are now directors
of the Company, have been designated as nominees for election to the Board for a
one-year term. All of these directors were elected by the shareholders of the
Company except Messrs. Ostrander and Sight, who were elected by the Board in
July, 1995. The persons named in the proxy, who shall be appointed by
shareholders as their agents to vote their shares of stock, intend to vote for
the election of these nominees. Each nominee has consented to being named and to
serve if elected. If any should decline or be unable to serve, the persons named
in the proxy will vote for the election of such substitute nominee as shall have
been designated by the Board of Directors. The Company has no reason to believe
that any nominee will decline or be unable to serve.

As in the coming year two of the current nominees will be of the retirement
age set in the Board's earlier policy statement, the Board has begun a search
for their replacements. It is the intention to add two or three new members to
the Board, as they are identified, in the coming year (resulting in a temporary
increase in the total number of directors), in order to allow for an appropriate
transition period, and so that the Company can have the benefit of contributions
from the new directors with respect to its planning and implementation for the
future. See also 'Election of Two Directors by Preferred Stockholders,'
following.

DIRECTOR OF
BUSINESS EXPERIENCE DURING PAST THE COMPANY COMMITTEE
NAME FIVE YEARS AND OTHER DIRECTORSHIPS AGE SINCE MEMBERSHIPS (1)
- ------------------------------------------------------------------------------------------------------------------------

Pemberton Hutchinson (2) Chairman of the Board of the Company 65 1977 Executive
(since January 1992); Chief
Executive Officer (January 1989
through June 1993); President of the
Company (June 1981 through June
1992)
Director of Mellon Bank Corporation,
Teleflex, Incorporated and The Pep
Boys

William R. Klaus Partner, Pepper, Hamilton & Scheetz, 70(3) 1973 Executive;
attorneys Compensation and
Benefits; Audit;
Independent
Directors

Christopher K. Seglem (2) Chief Executive Officer of the 49 1992 Executive
Company (since June 1993); President
of the Company (since June 1992);
Chief Operating Officer of the
Company (June 1992 through June
1993); Executive Vice President of
the Company (December 1990 through
June 1992)

Edwin E. Tuttle Director of CoreStates Bank, N.A. 69 1978 Executive; Audit;
and General Accident Insurance Independent
Company of America Directors

James W. Sight Director of United Recycling 40(4) July 1995 Independent
Industries (1995) Directors (5)
Director of U.S. Home Corp. (1993)
Private Investor

Thomas W. Ostrander Managing Director, Salomon Brothers 45 July 1995 Independent
Inc, investment banking firm (since Directors (5)
1989)
Works with a variety of domestic and
international corporations providing
services in the area of capital
formation, corporate strategy,
mergers and acquisitions and other
corporate and financial strategy
matters.

- -------------------
(1) See 'Information about the Board and Committees' following.

(2) Although reported in the Company's 1994 Annual Report and Form 10-K, the
Securities and Exchange Commission's proxy rules also require a description
of any bankruptcy petition filed during the past five years with respect to
a corporation of which a director nominee was an executive officer at or
within two years before the time of filing, giving rise to this footnote:
The Company filed a 'pre-packaged' plan of reorganization under the Federal
bankruptcy laws on November 8, 1994 to facilitate the sale of the assets of
its subsidiary, Criterion Coal Company, a portion of the proceeds of the
sale of which were to be used to repay maturing long-term debt. The
Company's plan of reorganization was confirmed on December 16, 1994. Mr.
Hutchinson was an executive officer of the Company within two years before
the time of the filing. Mr. Seglem held the executive offices indicated at
and within two years before the time of the filing, and upon the Company's
emergence from bankruptcy on December 22, 1994.

(3) In light of the retirement of three members of the Board of Directors as of
the date of the Annual Meeting of Shareholders in 1996, the Board has
determined that, in order to preserve continuity on the Board, and in order
to provide an orderly transition for new directors, it is in the best
interests of the Company to waive its previously adopted policy with
respect to retirement of Directors in the case of Mr. Klaus and ask Mr.
Klaus to stand for reelection despite the fact that he has attained age 70.
Mr. Klaus has agreed to do so. The Board and Mr. Klaus will consider this
subject annually hereafter.

(4) As noted under 'Election of Two Directors by Preferred Shareholders,' the
Company intends to hold a special meeting of the preferred shareholders
this year for the purpose of electing the two directors to which they are
entitled under the 'Preferred Shareholder Agreement' because the Company is
in arrears on six preferred dividends. The Company intends to nominate Mr.
Sight for one of these positions. Mr. Sight is currently serving on the
Board pursuant to an appointment that was made with the interests of the
preferred shareholders in mind, and under an agreement which requires him
to resign from his current position at the time such special election is
held.

(5) Mr. Sight and Mr. Ostrander were appointed to the Committee of Independent
Directors in February, 1996.

INFORMATION ABOUT THE BOARD AND COMMITTEES

The Board of Directors held 11 meetings during 1995. Each director attended
more than 75% of the aggregate of the total number of meetings of the Board of
Directors and of the total number of meetings held by all committees on which he
served during the time he was in office.

The Audit Committee of the Board of Directors, composed of Messrs. Tuttle
(Chairman), Klaus and Leisenring, met three times during 1995. This Committee,
which reports to the Board of Directors, reviews the adequacy of the Company's
internal accounting controls and oversees the implementation of management
recommendations. It also reviews with the Company's independent auditors the
audit plan for the Company, the internal accounting controls, financial
statements and management letter. It also recommends to the Board the selection
of independent auditors for the Company.

The Compensation and Benefits Committee of the Board of Directors, composed
of Messrs. Halsey (Chairman), Klaus and Black, met five times during 1995. This
Committee reviews the Company's and its subsidiaries' employee benefit programs
and management compensation and it reports its recommendations to the Board of
Directors.

The Executive Committee of the Board of Directors, composed of Messrs.
Leisenring (Chairman), Hutchinson, Tuttle, Klaus, Black and Seglem did not meet
during 1995.

The Committee of Independent Directors, composed of Messrs. Tuttle
(Chairman), Halsey and Klaus during this period, met twice during 1995. This
Committee is composed of directors who are not and have never been officers or
employees of the Company or of Penn Virginia Corporation (see 'Transactions with
Other Companies' below). It reviews matters involving transactions or issues
between the Company and Penn Virginia Corporation, to determine that the terms
and conditions of settlement are fair and reasonable to the Company and no less
favorable than if negotiated with an unaffiliated company.

The Board of Directors does not have a standing nominating committee.

ELECTION OF TWO DIRECTORS BY PREFERRED STOCKHOLDERS

The Company intends to hold a special meeting of the preferred shareholders
this year for the purpose of electing the two directors to which they are
entitled under the 'Preferred Shareholder Agreement' because the Company is in
arrears on six preferred dividends. The Company intends to nominate Mr. Sight
for one of these positions. Mr. Sight is currently serving on the Board pursuant
to an appointment that was made with the interests of the preferred shareholders
in mind, and under an agreement which requires him to resign from his current
position at the time such special election is held.

EXECUTIVE COMPENSATION

The following table sets forth information for 1995, 1994, and 1993 as to
the person who held the position of Chief Executive Officer during 1995 and the
other five most highly compensated executive officers at the end of 1995, whose
total salary and bonus for 1995 exceeded $100,000.

SUMMARY COMPENSATION TABLE (3)

LONG TERM COMPENSATION
--------------------------
ANNUAL COMPENSATION AWARDS
------------------------------------ --------------------------
OTHER RESTRICTED STOCK ALL
ANNUAL STOCK OPTIONS OTHER
NAME AND COMPEN- AWARD(S) (5) (#COMMON COMPEN-
PRINCIPAL POSITIONS YEAR SALARY BONUS (1) SATION ($) SHARES) SATION (2)
- --------------------------------------------------------------------------------------------------------------------------

Christopher K. Seglem, 1995 290,004(4) 162,402 0 75,000 99,973
Chief Executive Officer and 1994 290,004(4) 203,003 0 16,000 12,295
President 1993 270,504 175,621 0 52,000 12,792

Ronald W. Stucki, 1995 180,011(4) 86,405 0 20,000 38,293
Senior Vice President- 1994 180,011(4) 108,006 0 13,000 3,859
Operations 1993 162,124 93,438 1,532 12,000 3,712

Theodore E. Worcester, 1995 156,208(1) 74,980 0 20,000 40,476
Senior Vice President of Law 1994 156,208(1) 93,725 0 13,000 3,784
and Administration and General 1993 143,568 81,083 0 12,000 3,385
Counsel

Matthew S. Sakurada, 1995 161,164 77,322 0 0 3,750
President of Westmoreland 1994 150,762 93,725 0 13,000 3,633
Energy, Inc. 1993 116,065 44,800 0 0 2,649

R. Page Henley, 1995 156,169 74,961 0 12,731 0 5,195
President, Westmoreland 1994 156,169 31,234 0 3,500 3,769
Coal Sales Company, Inc. 1993 156,169 0 0 0 16,636

Robert J. Jaeger, 1995 84,175(6) 38,016 0 20,000 4,206
Vice President of Finance, 1994 -N/A- -N/A- -N/A- -N/A- -N/A-
Treasurer and Controller 1993 -N/A- -N/A- -N/A- -N/A- -N/A-

(1) The amounts presented in the bonus column for 1995 represent total bonuses
earned for 1995 based on accomplishment of strategic objectives. Of the
total amount for each individual, 50 percent was paid in the first quarter
of 1996. Payment of the remaining 50 percent will be deferred until the
earliest to occur of (a) such year in which the Company has a positive cash
flow from operations or (b) upon sale, merger or liquidation of the
Company, provided that the individual is employed by the Company at the
time the 50 percent would be paid, or if not employed, such employment was
terminated by reason other than voluntary resignation (which would include
a decision to not accept relocation of employment), or other than for
discharge due to gross or willful misconduct.

(2) All Other Compensation for the named executive officers in 1995 consisted
of directors' fees, Company contributions to the 401(k) salary savings plan
(the 'Plan') for the four Plan quarters ending November 30, 1995, one
month's salary for relocation, moving expenses and reimbursement for
temporary living costs as set forth in the following. Mr. Seglem received
directors' fees of $7,150.

Amounts contributed to the Plan during 1995 on behalf of the named
executives included: Mr. Seglem-$3,750, Mr. Stucki-$3,750, Mr.
Worcester-$3,750, Mr. Henley-$3,750, Mr. Sakurada-$3,750 and Mr.
Jaeger-$519. The one month's salary paid to relocating employees is a
company policy and included amounts for the following named executives: Mr.
Seglem-$24,167, Mr. Stucki- $15,001 and Mr. Worcester- $13,017. Amounts
paid for moving and related expenditures on behalf of the named executives
included: Mr. Seglem-$64,906, Mr. Stucki- $19,542, Mr. Worcester- $23,709
and Mr. Henley-$1,445. Also, Mr. Jaeger was reimbursed $3,687 principally
for temporary living costs.

(3) The Company has an Executive Severance Policy, amended with the consent of
the participants, which covers certain of the executive officers named
above, and provides that in the event of termination of such person's
employment with the Company or its subsidiaries for reasons set forth in
the Policy, or from a change-in-control of the Company, as defined in the
Policy, such executive officer will be entitled to a severance award. This
award shall include an amount equal to twice the executive officer's annual
average cash compensation, defined as the greater of the annualized base
salary at the time of severance plus the amount of bonus awarded (including
amount deferred) in that year or the annual average of the executive
officer's most recent five calendar years of base salary and bonus awarded
(including amount deferred), including the year of termination. The
severance award will be paid in approximately equal monthly installments
over a period of 24 months following the date of termination, unless the
executive officer elects to receive the present value of his total
severance, including the present value of executive benefits, in a lump sum
cash distribution at the time of termination.

(4) Salary increases were not granted to Messrs. Seglem, Stucki, Worcester or
Henley in 1994 or 1995. The larger amounts reflected for Messrs. Seglem,
Stucki and Worcester for 1994 as compared to 1993 are due to their
increases in 1993 being in effect for only part of 1993, but for all of
1994.

(5) Mr. Henley was granted 5,000 shares of restricted stock under the
Westmoreland Coal Company 1995 Long-Term Incentive Stock Plan. These shares
are valued in the Table at the closing price of the Company's common stock
on the date of grant (12/5/95). These shares will cease to be restricted if
Mr. Henley remains an employee of the Company until January 1, 1997.
Neither the grant of the restricted stock nor his vesting in the stock will
require any consideration to be paid by Mr. Henley.

(6) Mr. Jaeger was hired April 17, 1995.

The following table represents information regarding options to purchase
common shares granted to the named executive officers in 1995:

OPTION/SAR GRANTS IN LAST FISCAL YEAR

- -----------------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
- -----------------------------------------------------------------------------------------------------------------
NUMBER OF PERCENT OF TOTAL EXERCISE OR EXPIRATION
SECURITIES OPTIONS GRANTED BASE PRICE DATE GRANT DATE PRESENT VALUE*
NAME UNDERLYING TO EMPLOYEES IN PER SHARE
OPTIONS FISCAL YEAR
GRANTED
- -----------------------------------------------------------------------------------------------------------------

Christopher K. Seglem 75,000 28.6% $2.625 12/5/2003 $117,750
Ronald W. Stucki 20,000 7.6% $2.625 12/5/2003 $ 31,400
Theodore E. Worcester 20,000 7.6% $2.625 12/5/2003 $ 31,400
Robert J. Jaeger 20,000 7.6% $2.625 12/5/2003 $ 31,400

* This calculation was made using the Black--Scholes option pricing model. The
model assumes: (a) an option term of 10 years, which represents the length of
time between the grant date of options under the Company's 1995 incentive
stock option plans and the expiration date of the options; (b) an interest
rate that represents the zero-coupon Government Bond yield available on the
grant date and maturing at the end of the option term; (c) stock volatility
based on monthly closing market prices for December 1992 through December
1995; and (d) a dividend yield which represents the quarterly dividends paid
divided by the quarterly closing market prices, annualized for the 12
quarters from December 1992 through December 1995.

The following table presents information regarding the number of
unexercised options to purchase common shares and the number of unexercised
stock appreciation rights at December 31, 1995:

AGGREGATED OPTION/SAR EXERCISES IN THE LAST FISCAL YEAR AND FY-END OPTION/SAR
VALUES

- -----------------------------------------------------------------------------------------------------------------
NUMBER OF VALUE OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY
NAME UNEXERCISED OPTIONS AT OPTIONS AT
DECEMBER 31, 1995 DECEMBER 31, 1995
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -----------------------------------------------------------------------------------------------------------------

Christopher K. Seglem 77,197 117,000 -0- -0-
Ronald W. Stucki 26,000 39,000 -0- -0-
Theodore E. Worcester 26,000 39,000 -0- -0-
Matthew S. Sakurada 3,371 26,000 -0- -0-
R. Page Henley 26,046 3,500 -0- -0-
Robert J. Jaeger -0- 20,000 -0- -0-

No member of the named executive officer group exercised any options during
1995, or held any unexercised SARs as of December 31, 1995.

RETIREMENT PLAN

The Company sponsors a Retirement Plan (the 'Plan') for eligible employees
of the Company and its subsidiaries to which employees make no contributions.
All employees whose terms and conditions of employment are not subject to
collective bargaining and who work 1,000 or more hours per year are eligible for
participation in the Plan. Eligible employees become fully vested after five
years of service, or in any event, upon attaining age 65.

In general, the Plan provides for payment of annual retirement benefits to
eligible employees equal to 1.2% of any employee's average annual salaried
compensation (over the sixty most highly compensated consecutive months of
employment) plus .5% of such average annual compensation in excess of the
employee's pay used to determine Social Security retirement benefits ('covered
compensation') for each year of service to a maximum of 30 years. The plan also
provides for disability benefits and for reduced benefits upon retirement prior
to the normal retirement age of 65.

No amounts are included in the salary compensation column of the Summary
Compensation Table above in respect of Plan contributions by the Company and its
subsidiaries because the Plan is a qualified defined benefit plan. Based on the
most recent actuarial valuation, dated December 1, 1994, no contribution is
required or permitted to this Plan for 1995, due to the full funding limitations
imposed under the Employee Retirement Income Security Act of 1974, as amended
('ERISA'). The basis upon which benefits are computed is a straight-life
annuity; payments are available in other forms on an actuarially reduced basis
equivalent to a straight-life annuity. Benefit amounts set forth in the table
below are not subject to any deduction for Social Security benefits or other
offset amounts.

The following table shows estimated annual retirement benefits, which are
representative of an employee currently age 65 whose salary remained unchanged
during his or her last five years of employment and whose benefit will be paid
for the life of the employee:

ANNUAL BENEFIT FOR YEARS OF
COMPENSATION SERVICE CREDITED
- ------------------------------------------------------------------------------

10 20 30 OR MORE
--------- --------- -----------
$25,000 $ 3,000 $ 6,000 $ 9,000
50,000 7,204 14,408 21,612
100,000 15,704 31,408 47,112
150,000 24,204 48,408 72,612
200,000 32,704 65,408 98,112
250,000 41,204 82,408 123,612
300,000 49,704 99,408 149,112

Years of service credited under the Plan for the following individuals are:
Mr. Seglem-15 years, Mr. Stucki-15 years, Mr. Worcester-5 years and Mr.
Sakurada-17 years, Mr. Henley-12 years, Mr. Jaeger-0 years.

The current compensation covered by the Plan for any named executive
officer in the Summary Compensation Table is that amount reported in the Salary
column, subject to limitations imposed by the Internal Revenue Code.

The annual benefit presented in the above table reflects the inclusion of a
Supplemental Executive Retirement Plan (the 'SERP'), established by the Company,
effective January 1, 1992, which currently covers all the executive officers
named above. Senior management and certain other key individuals shall be
eligible to participate in the SERP.

To become vested in the SERP, a participant must attain age 55 and
generally complete 10 years of service. The SERP is a non-qualified plan which
supplements the Retirement Plan by not being limited by the Internal Revenue
Code requirements on annual compensation that may be considered in determining a
participant's annual benefit and the amount of annual benefit payable to the
participant. Bonus amounts are included in a participant's compensation under
the SERP, although excluded under the Retirement Plan. Benefits are payable out
of the Company's general assets, and shall commence and be payable at the same
time and in the same form as the Retirement Plan.

COMPENSATION OF DIRECTORS

Throughout 1995 the attendance fee for the Chairman of the Board of
Directors was $1,300, for each committee chairman was $750 and for each director
attending a Board or committee meeting was $650. The attendance fees paid to Mr.
Seglem are included in the All Other Compensation column of the Summary
Compensation Table.

Throughout 1995, the annual retainer fee to each outside director was
$15,000, of which $9,000 was paid in cash, and the $6,000 remaining could be
used to purchase stock of the Company, or at the director's election could also
be paid in cash.

Mr. Hutchinson retired as an employee of the Company as of December 31,
1993. For the period January 1, 1994 to the Annual Meeting of Shareholders in
1996, he has agreed to provide consulting services to the Board of Directors as
it may request, for which he will receive $1,250 per month. Such services may
include advice with respect to matters of corporate strategy and shareholder
relationships. Mr. Hutchinson is also receiving benefit payments from the
Company's SERP (see discussion under Retirement Plan, supra).

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS

Messrs. Halsey, Klaus and Black served on the Compensation and Benefits
Committee during 1995. Mr. Black, who is not standing for reelection, is
Chairman of the Board and Chief Executive Officer of Penn Virginia Corporation.
See discussion under 'Transactions with Other Companies,' following. There were
no other compensation committee interlocks or insider participation in
compensation decisions affecting executive officers.

No member of this Committee was an officer or employee of the Company. No
executive officer of the Company served either as a member of the compensation
committee or as a director of a company, one of whose executive officers served
on the Company's Compensation and Benefits Committee, or as a member of the
compensation committee of a company, one of whose executive officers served as a
Director of the Company.

COMPENSATION & BENEFITS COMMITTEE REPORT ON EXECUTIVE COMPENSATION

In determining the compensation for the Company's Chief Executive Officer
for the year ended December 31, 1995, the Compensation & Benefits Committee
considered quantitative, qualitative and comparative factors.

Quantitative factors considered included (i) the substantial progress in
implementing the plan to dispose of underperforming and non-core assets, most
significantly, the sale of the Duke Power Contract, the sale of Cleancoal
Terminal and elimination of the Bonny Note Guarantee, and the completion of the
Hampton Division sale, (ii) idling the Virginia Division, thus eliminating
substantial cash losses while avoiding triggering of withdrawal liabilities,
(iii) implementation of an early retirement plan saving corporate cash in the
downsizing and relocation of the Philadelphia office and the idling of the
Virginia Division, (iv) significant accomplishment at Westmoreland Resources
including obtaining a contract with Otter Tail Power, settling a tax issue with
the State of Montana, and closing the Billings office and relocating functions
to the mine site and to the corporate headquarters resulting in additional cash
savings, (v) formation and implementation of long-term Virginia operating plan,
(vi) final funding and commercial operation of the ROVA II independent power
project, (vii) completion of the Corona acquisition, and (viii) reducing other
overhead costs for items such as insurance, corporate office expense, and
corporate headquarters staff.

The qualitative factors considered included uncontrollable factors
affecting the Company's performance, the Chief Executive Officer's knowledge of
and experience with the Company's business operations, his leadership qualities
affecting the Company's relationships with shareholders, consultants, advisors,
customers, suppliers, employees, collective bargaining organizations and the
communities within which the Company has operations, his overall management
abilities, initiatives and planning for the future and his extraordinary efforts
put forth by means of diligence, hard work and exceptionally long hours.

Comparative factors considered were compensation paid to chief executive
officers of comparably sized companies, and particularly of those of companies
in the coal and independent power industries and work-out situations.

With respect to the other named executive officers, the Committee
considered the quantitative and comparative factors mentioned above, as well as
the evaluations by Mr. Seglem of the officers' performances including the fact
that the corporate headquarters is performing the same functions as it has in
previous years with a substantial reduction in personnel.

These factors were considered for purposes of determination of base salary
and bonus. No base salary increases were granted to Messrs. Seglem, Stucki,
Worcester or Henley in 1995 due to the Company's financial and operational
positions, and the need to conserve cash during the year. Mr. Sakurada's salary
was increased during 1995 to reflect the comparative compensation paid to
persons in similar positions in the independent power industry who were
performing the functions undertaken by Westmoreland Energy, Inc. at the time.

The Company has a program designed to compensate management for performance
and results and to place a substantial portion of the total compensation package
'at risk.' The bonus program recognizes the critical and difficult circumstances
within which the company is currently operating, thereby requiring performance
and results to be evaluated more on strategic, rather than financial, criteria.
Retention of key management personnel during this difficult period is a major
factor of this bonus program. The current bonus

plan defers a substantial portion of the award until the earliest to occur of
certain events. (See Summary Compensation Table and footnote 1 thereto, supra.)
No part of these bonuses is paid, if at all, sooner than the calendar year
following the year of performance, and total bonuses awarded are included in
compensation tables for the year earned. Bonuses were awarded in 1996 for 1995
performance to Mr. Seglem (who under the program was eligible for a bonus of up
to 70 percent of his base pay) and to other named executive officers (who were
eligible for bonuses of up to 60 percent of their base pay). The award of
bonuses for 1995 took into account that bonuses had not been awarded for 1992
and that a substantial amount of the bonuses awarded for 1994 remains 'at risk.'
Of total bonuses awarded for 1994, only 35 percent was paid in 1995, and payment
of the remaining 65 percent deferred. Of total bonuses awarded for 1995, 50
percent was paid and the remaining 50 percent deferred.

The Committee believes that stock options are an important feature of
executive compensation. Stock option awards made to executive officers are
designed to align the interests of management more closely with those of the
shareholders of the Company by increasing stock ownership by management. The
value of the stock options is directly tied to the value of a share of the
Company's common stock. On December 5, 1995, the Committee awarded options to
Mr. Seglem to acquire 75,000 shares of the Company's common stock, and to each
of Messrs. Stucki, Worcester and Jaeger, it awarded options to acquire 20,000
shares of common stock, an aggregate of 135,000 options. In addition, Mr. Henley
was awarded 5,000 shares of restricted stock. The option exercise price for the
options granted on December 5, 1995 was $2.625, and represented the closing
price of the Company common stock on the New York Stock Exchange as of the close
of business on the day the options were granted, requiring an increase in common
stock value before any value would be created by the options.

The Committee presently intends to award the balance of the shares in the
1995 Long-Term Incentive Stock Plan (representing 90,000 remaining shares) in
late 1996 and to propose another long term incentive plan to the shareholders in
1997.

The Committee believes that the combination of bonuses and grants of stock
options is necessary to attract and retain senior management of the caliber to
best serve the Company.

Brenton S. Halsey, Chairman
William R. Klaus
Lennox K. Black

PERFORMANCE GRAPH

The following Performance Graph compares the cumulative total shareholder
return on the Company's common stock for the five-year period December 31, 1989
through December 31, 1994 with the cumulative total return over the same period
of the Standard & Poor's 500 Stock Index and the companies comprising the Dow
Jones Coal Index.

PERFORMANCE GRAPH

[In the printed version, a line chart appears here, depicting the
following information:]

Month/ Westmoreland Dow Jones
Year Coal Company S&P 500 Coal
- ------ -------------- ------- --------------

12/90 100 100 100
12/91 99 130 100
12/92 56 140 90
12/93 26 155 132
12/94 34 157 130
12/95 13 215 137

*$100 invested on 12/31/90 in stock or index-including reinvestment of
dividends. Fiscal year ending December 31.

NOTE: The companies comprising the DJ COAL INDEX were Pittston Minerals Group,
Penn Virginia Corporation, Addington Resources, Zeigler Coal Holding Company and
Cyprus AMAX Minerals.

TRANSACTIONS WITH OTHER COMPANIES

The Company leases coal reserves and land on which the Company has built
coal preparation plants and other structures from Penn Virginia Resources
Corporation ('PVRC'), a wholly-owned subsidiary of Penn Virginia Corporation, of
which Mr. Black (who will serve on the Company's Board until the annual meeting
in 1996) is Chairman of the Board and Chief Executive Officer. During 1995 the
Company paid royalties under these leases in the amount of $5,325,000. The
Company believes that at the time the leases of coal reserves and land were
entered into with PVRC, and when certain of their terms were renegotiated,
pursuant to the provisions thereof, the leases were on terms fair and reasonable
to the Company and no less favorable to the Company than if the leases were from
unaffiliated companies.

In January 1995, the Company released its rights in certain coal reserves
in West Virginia to an indirect subsidiary of Penn Virginia Corporation (and
assignee of PVRC) in exchange for $3 million of cash and a guarantee by Penn
Virginia Corporation of certain environmental reclamation and remediation
obligations of a third party to whom the Company, in a related transaction, had
sold operating assets of its Hampton, West Virginia, Division, on terms
considered fair and reasonable to the Company and no less favorable than if
negotiated with an unaffiliated company.

Pursuant to an agreement dated as of July 9, 1992 by and among the Company,
Penn Virginia Corporation and Penn Virginia Equities Corporation ('Equities'),
Equities was granted certain registration rights with respect to the 1,754,411
shares of the Company's common stock which it owns. The right to demand such
registration was to expire on July 9, 1995. Equities did by letter dated March
13, 1995 make written request to the Company for registration of such shares
with the Securities and Exchange Commission in accordance with the provisions of
the Securities Act of 1933. By agreement dated June 29, 1995, Equities withdrew
this demand in exchange for an extension of the termination of such demand
registration right to the earlier of 90 days after the date upon which the
Company's 1995 Annual Report on Form 10-K is filed (which report was filed on
April 15, 1996) or September 29, 1996, and Equities agreed not deliver another
demand notice prior to the earlier of May 31, 1996, or the date such Annual
Report on Form 10-K was filed.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES AND EXCHANGE ACT

Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's officers and directors and persons who own more than ten percent of a
registered class of the Company's equity securities to file reports of ownership
and changes in ownership with the Securities and Exchange Commission. Officers,
directors and greater than ten percent shareholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.

To the Company's knowledge, all statements of beneficial ownership required
to be filed with the Securities and Exchange Commission in fiscal 1995 were
timely filed, except a Form 4 was late in filing to report the disposal of 2,000
shares of Common Stock by Mr. Leisenring's wife.

1996 DIRECTORS' STOCK OPTION PLAN

The Board of Directors proposes the Westmoreland Coal Company 1996
Directors' Stock Option Plan (the 'Plan'), and intends to adopt the Plan
immediately after the June 12, 1996 Annual Meeting if the Plan is approved by
the Shareholders at that meeting. The Board of Directors believes that the Plan
will enable the Company to attract and retain qualified Directors and to align
the interests of those Directors with the Company's shareholders.

The Plan provides for the grant of non-qualified stock options ('NQSOs') to
Directors. Options give the Directors the right to purchase from the Company a
specified number of shares of the Company's common stock for a specified price
during a specified period.

Under the Plan awards will be granted by the Board of Directors on an
annual basis. The total number of shares of the Company's common stock reserved
and available for awards under the Plan will be 350,000. The Board intends to
grant options as follows: Options representing 20,000 shares will be granted at
the close of business on the day after the 1996 annual meeting to each Director
elected at that meeting. Options representing 20,000 shares will be granted to
each new Director as of the close of business on the first business day after a
Director is first elected or appointed to the Board of Directors. Options
representing 10,000 shares will be granted to each Director on the first
business day after the Annual Meeting of Shareholders in 1997 and each annual
meeting thereafter, unless a Director has been elected or appointed to the Board
of Directors for the first time at that meeting and is therefore eligible for
options representing 20,000 shares as provided herein.

Awards under the plan will be deemed a portion of the consideration paid to
Directors for their services. In the event the Board determines that a stock
dividend, recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, spin-off, combination or other similar corporate
transaction may affect the rights of participants, the Board may adjust the
awards outstanding, or to be granted, and the conditions thereof.

The Plan may be amended by the Board of Directors but any amendment that
would (i) materially increase the aggregate number of shares that may be issued
under the Plan, except for adjustments as set forth in the preceding paragraph,
(ii) materially modify the requirements for eligibility to participate in the
Plan, or (iii) materially increase the benefits accruing to participants, would
require shareholder approval.

Furthermore, any amendment, alteration, suspension, discontinuance or
termination of the Plan which would impair the rights of any participant to whom
an award has been granted will require the consent of the participant.

NQSOs granted under the Plan will have an exercise price of the fair market
value of a common share on the date of grant of such option. NQSOs shall expire
not later than 10 years after the date of grant.

Options granted pursuant to this plan shall vest 25% per year over a four
year period, so that 25% vest after the first year, another 25% after the second
year, another 25% after the third year and the final 25% after the fourth year.
Options granted during a director's period of active service shall continue to
vest pursuant to this schedule after a director leaves the Board due to reaching
retirement age.

Awards granted under the Plan are not transferable except by will or by the
laws of descent and distribution, and during the life of the participant are
exercisable only by him, or his guardian or legal representative.

In the event of a change of control of the Company, any option that was not
previously exercisable and vested will become fully exercisable and vested.

The Board has full and final authority to administer the Plan, including
but not limited to (i) determining the form of award agreement, which need not
be identical for each person, (ii) correcting any defect or supplying any
omission or reconciling any inconsistency in the Plan and construing and
interpreting the Plan and any award, rules and regulations, award agreement or
other instrument thereunder, and (iii) making all other decisions and
determinations required under the Plan or as it may deem necessary or advisable.

No awards have been granted under the Plan, and there is no intention to
grant such awards until the Plan has been approved by the shareholders. At that
time options will be awarded as provided above.

Within a reasonable time after approval of the Plan by the shareholders, it
is the intention to register the 350,000 shares of common stock issuable under
the plan, pursuant to the Securities Act of 1933, as amended.

The Company has been advised by counsel that under present federal tax
laws, the federal income tax consequences of NQSOs are as follows:

A participant recognizes no income and the Company receives no deduction
upon the grant of an NQSO. Upon exercise of an NQSO, a participant must include
as ordinary income the excess of the fair market value of the stock on the date
of exercise over the exercise price, and the Company will receive a deduction at
the same time and in the same amount. The Company will be required to withhold
federal income taxes and other taxes. The holding period for capital gain or
loss treatment will begin to run at that time. The gain or loss will be measured
by the difference between the sale price and the fair market value of the shares
on the date of exercise, and if such shares have been held for more than one
year (under current law), the participant will be entitled to long-term capital
gain treatment.

The value of a share of the Company's common stock, as defined in the Plan,
was $3.125 on April 17, 1996.

The Plan will terminate on June 12, 2006, unless sooner terminated by the
Board.

The Board of Directors recommends that the shareholders vote FOR the
adoption of the 1996 Directors' Stock Option Plan.

NEW PLAN BENEFITS
1996 DIRECTORS' STOCK OPTION PLAN (1)

- --------------------------------------------------------------------------------------------------------------
NAME AND POSITION DOLLAR VALUE ($) NUMBER OF UNITS
- --------------------------------------------------------------------------------------------------------------

Christopher K. Seglem, CEO (2) 37,368(3) 20,000
Executive Group N/A N/A
Non-Executive Director Group 186,843(3) 100,000
Non-Executive Officer Employee Group N/A N/A

(1) The benefits presented in this table assume that the Plan is approved at
the Annual Meeting of Shareholders, that the Directors nominated elsewhere
in this proxy are elected, and that the Plan is adopted by the newly
elected Board and options are granted as described in the foregoing
summary.

(2) Mr. Seglem will receive these options in his capacity as a Director.

(3) The value of these options has been calculated using the Black-Scholes
option pricing model and the same assumptions as those stated in the
footnote to the 'Option/SAR Grants in Last Fiscal Year' table on page 12 of
this proxy except that the closing price as of April 17, 1996 ($3.125 per
share) was used.

INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

KPMG Peat Marwick were the Company's independent auditors for the year
1995. A representative of that firm will be present at the annual meeting and
will have the opportunity to make a statement, if he desires to do so, and to
respond to appropriate questions from the shareholders.

SHAREHOLDER PROPOSALS

Any proposal submitted by shareholders for inclusion in the Company's proxy
statement and proxy for the 1997 annual meeting of shareholders of the Company
must be received by the Company at its principal executive offices no later than
December 27, 1996 and must comply in all other respects with applicable rules
and regulations of the Securities and Exchange Commission relating to such
inclusion.

* * *

UPON THE WRITTEN REQUEST OF ANY PERSON WHO ON THE RECORD DATE WAS A RECORD OWNER
OF COMPANY STOCK, OR WHO REPRESENTS IN GOOD FAITH THAT HE OR SHE WAS ON SUCH
DATE A BENEFICIAL OWNER OF SUCH STOCK ENTITLED TO VOTE AT THE ANNUAL MEETING,
THE COMPANY WILL SEND SUCH PERSON, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT
ON FORM 10-K FOR 1995, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
REQUESTS FOR THIS REPORT SHOULD BE DIRECTED TO ROBERT J. JAEGER, SENIOR VICE
PRESIDENT OF FINANCE, TREASURER AND CONTROLLER, WESTMORELAND COAL COMPANY, 14TH
FLOOR--HOLLY SUGAR BUILDING, 2 NORTH CASCADE AVENUE, COLORADO SPRINGS, COLORADO
80903.

OTHER BUSINESS

The Board of Directors has no present intention of bringing any other
business before the meeting and has not been informed of any other matters that
are to be presented to the meeting. If any other matters properly come before
the meeting, however, the persons named in the enclosed proxy will vote in
accordance with their best judgment.

By order of the Board of Directors.

Theodore E. Worcester
Corporate Secretary

PROXY

WESTMORELAND COAL COMPANY
Proxy Solicited on Behalf of the Board of Directors
Annual Meeting--June 12, 1996

The undersigned hereby constitutes and appoints Pemberton Hutchinson,
Christopher K. Seglem, and Theodore E. Worcester and each of them, as true and
lawful agents and proxies with power of substitution, to represent the
undersigned and to vote all shares of stock held by the undersigned at the
annual meeting of shareholders to be held at the Antlers Doubletree Hotel,
Colorado Springs, CO on Wednesday, June 12, 1996 at 10:00 A.M. (Mountain
Daylight Time), and at any adjournments thereof, on all matters coming before
said meeting as noted on the reverse side of this card.

Election of Directors, Nominees:

Pemberton Hutchinson, William R. Klaus, Thomas W. Ostrander,
Edwin E. Tuttle, James W. Sight and Christopher K. Seglem

This card also serves to instruct Mellon Bank, N.A., Trustee of the
Westmoreland Coal Company and Affiliated Companies Employees Savings/Retirement
Plan how to vote shares held by the Trustee for any stockholders or employees
participating in the Plan. The Trustee has been authorized in its discretion to
exercise voting rights for shares held in the Plan if no written instructions
are received. Written voting instructions must be received by the Trustee by
June 1, 1996. Voting instructions received by the Trustee will be kept
confidential.

SEE REVERSE SIDE

FOLD AND DETACH HERE

[LOGO]

WESTMORELAND COAL COMPANY
1996 ANNUAL MEETING OF SHAREHOLDERS

JUNE 12, 1996
10:00 A.M.

THE ANTLERS DOUBLETREE HOTEL
4 SOUTH CASCADE AAVENUE
COLORADO SPRINGS, COLORADO

See reverse side for directions to the meeting.

/X/ Please mark your
votes as in this
example.
This proxy, when properly executed, will be voted in the manner directed herein.
If no directions are given, this proxy will be voted FOR the election of
directors, and FOR proposal 2.

The Board of Directors recommends a vote FOR

FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of 2. Proposal to
Directors approve adoption
(see reverse of 1996 Directors'
Stock Option Plan
/ / / / / / / / / /

For, except vote withheld from the following nominee(s):

_________________________________________________________

Special
Action
(For Multiple-Account Holders Only)
Discontinue Annual Report
Mailing for This Account / /

Will Attend Annual Meeting / /

RECEIPT OF THE 1995 ANNUAL REPORT
AND NOTICE OF MEETING AND PROXY
STATEMENT DATED APRIL 26, 1996 ARE
HEREBY ACKNOWLEDGED.

SIGNATURE(S)____________________DATE___________, 1996

NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee, guardian or
corporate officer, please give full title as such.

FOLD AND DETACH HERE

DIRECTIONS TO WESTMORELAND COAL COMPANY
ANNUAL MEETING

[In the printed version, a map appears here, depicting the directions to
Westmoreland Coal Company]

From Denver, take Interstate I-25 South to Exit #143, Bijou Street. Turn left
(east) and follow the traffic pattern to Cascade Avenue. Turn right (south) on
Cascade Avenue. Go one block and turn right onto Pikes Peak Avenue. An
underground pay parking entrance is on the left. A second parking entrance is at
the rear of the Norwest Bank building. Handicapped parking is available.

Separate elevators for the Holly Sugar Building and the Antlers Doubletree Hotel
are marked in the parking deck.

A guest registration and "drop-off" area is located in front of the Antlers
Doubletree Hotel. Entrance to the hotel driveway is from Cascade Avenue, and is
noted on the map in grey.