EXHIBIT 10.1

AMENDMENT NO. 2 TO
BUSINESS LOAN AGREEMENT

                THIS AMENDMENT NO. 2 TO BUSINESS LOAN AGREEMENT (the
“Agreement”) dated and made effective as of November 20, 2008 (the “Effective
Date”), by and among WESTMORELAND RESOURCES, INC., a Delaware corporation
(“Borrower”) and WESTMORELAND COAL COMPANY, a Delaware corporation
(“Guarantor”), and FIRST INTERSTATE BANK, a Montana banking corporation
(together with any subsequent holder or holders of the Notes, the “Lender”).

RECITALS

                A.     Lender and Borrower are parties to a Business Loan
Agreement dated October 29, 2007, as amended by Amendment to Business Loan
Agreement and Commercial Security Agreement dated October 16, 2008 (the
“October 2008 Amendment”) (as amended, the “Loan Agreement”) providing for an
$8,500,000.00 term loan, evidenced by a promissory note (the “Term Note”) and a
$20,000.000.00 revolving loan, evidenced by a promissory note (the “Revolving
Note”) (the Term Note and Revolving Note are herein sometimes referred to as the
“Notes”);

                B.     The obligations under the Loan Agreement, the Term Note
and the Revolving Note are secured by inventory, chattel paper, accounts,
equipment and intangibles of Borrower (subject to the exceptions thereto set
forth in the October 2008 Amendment), and supported by the Commercial Guaranty
of Guarantor and Guarantor’s pledge of 100% of the common stock of Borrower;

                C.     On October 28, 2008, Borrower and Lender entered into a
Change in Terms Agreement which extended the maturity of the Revolving Note from
October 28, 2008 to November 28, 2008 and reduced the maximum credit from
$20 million to $10 million.

                D.     Borrower has requested that Lender extend the Maturity
Date of the Revolving Note, on the terms and conditions set forth herein and in
the Change in Terms Agreement attached hereto as Exhibit 1 (the “Loan
Modification”); and

                E.     Lender is willing to make the Loan Modification subject
to and conditioned upon the terms and conditions herein set forth.

AGREEMENT

                NOW THEREFORE, in consideration of the Recitals above, of the
mutual covenants, representations and warranties below, and other good and
valuable consideration, the receipt and sufficiency of which are acknowledged by
each party, the parties agree, intending to be legally bound, as follows:

                1.     Recitals.   The Recitals listed above form an integral
part of this Agreement and are fully binding upon each party hereto.

1

--------------------------------------------------------------------------------

                2.     Defined Terms.   Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to them in the Loan Agreement.

                3.     Modification of Related Documents. The following terms
and conditions of this Agreement shall control, and shall be deemed to modify
and amend all contrary and inconsistent terms and conditions of the Loan
Agreement and Related Documents as necessary to give full force and effect to
the following as of the Effective Date:

    a.   Maturity Date.   Any and all references in the Loan Agreement and
Related Documents to the Maturity Date of the Revolving Note are hereby amended
and modified as necessary to specifically refer to the new Maturity Date for the
Revolving Note of November 19, 2009.

    b.   Modification Fee.   Contemporaneous with the parties’ execution of this
Agreement, Borrower has paid a non-refundable loan modification fee of
$200,000.00, receipt of which is hereby acknowledged by Lender.

    c.   Related Documents.   Any and all references in the Loan Agreement and
Related Documents shall henceforth mean the Loan Agreement and Related Documents
as they have been modified and amended hereby, and henceforth all references to
“Related Documents” in the Related Documents shall include this Agreement and
the other documents and instruments executed and delivered in conjunction with
the Loan Modification.

    d.   Prepayments on Term Note.  Borrower shall not make any prepayments of
principal on the Term Note at any time there is a continuing Event of Default
under the Loan Agreement or any of the Related Documents, until the Revolving
Note is paid in full; provided, however, that scheduled payments of principal
and interest may be made during such period. Otherwise, Term Note prepayments or
advance payments on principal can be made at any time. Any prepayments, if
permitted, shall be applied on the Term Note principal in the inverse order of
maturity, and shall not relieve Borrower from paying the next succeeding
installment or installments of principal and interest due under the Term Note.

                4.     Priority of Liens and Security Interests.   The Related
Documents, as modified hereby and by the October 2008 Amendment, shall continue
to fully and completely secure all of Borrower’s obligations as represented by
the Notes and Related Documents. Nothing contained herein is intended to change
or adversely affect the perfection or priority of any lien or security interest
previously granted as security for the Notes under the Related Documents, and
all such liens and security interests shall continue in effect and shall secure
the Notes according to their original priority and effective dates.

                5.     Inconsistency.   To the extent there is any inconsistency
between the terms of this Agreement and the terms of any of the Related
Documents, the terms of this Agreement shall control and shall be given full
force and effect.

2

--------------------------------------------------------------------------------

                6.     Representations and Warranties.   Borrower represents and
warrants (a) Borrower’s execution of this Agreement is fully authorized pursuant
to Borrower’s bylaws and governing agreements; (b) the execution and performance
of this Agreement by Borrower will not conflict with, or result in a breach or
violation of, any other agreement, law or order binding on it; (c) all necessary
consents, votes, and other approvals required to make this Agreement binding and
enforceable against Borrower have been obtained; (d) this Agreement represents a
valid and binding contract of Borrower, enforceable in accordance with its
terms.

                7.     Expenses.   Borrower shall pay all expenses and costs of
Lender in connection with this Agreement, including, without limitation, the
fees and expenses of counsel for Lender in connection with the preparation,
execution and delivery of this Agreement. In the event that any party to this
Agreement breaches this Agreement, a non-breaching party shall be entitled to
enforce the provisions hereof and to recover from the breaching party any and
all reasonable attorney’s fees and other expenses incurred by the non-breaching
party in enforcing the terms of this Agreement.

                8.     Ratification, Estoppel, Release.  

    a.   All terms and conditions of the Loan Agreement and Related Documents
that are not contrary to, or inconsistent with, the terms and conditions of this
Agreement shall remain in full force and effect and are hereby reaffirmed,
ratified, confirmed as of the date hereof and are incorporated herein by
reference.

    b.   Each of the representations, warranties, covenants, and agreements of
Borrower, and Guarantor, as set forth in the Loan Agreement and Related
Documents are true today, to the same extent as if made today, and are
incorporated herein by reference as though more fully set out, except as
modified herein.

    c.   Borrower and Guarantor each further represent and warrant that as of
the date of this Agreement there are no counterclaims, defenses or offsets of
any nature whatsoever to any of the obligations of such parties under the Loan
Agreement or Related Documents. Borrower and Guarantor each hereby waive,
discharge, and release forever all existing rights, claims, defenses, or causes
of action, known or unknown, now existing, whether discovered hereafter or not,
including but not limited to those related to the Loan which arise from any
action or inaction by Lender, and which occurred on or before the date of this
Agreement, which each may have against Lender or which might affect the
enforceability by Lender of its rights and remedies under any of the Related
Documents. Borrower and Guarantor each acknowledge and agree that the waivers,
discharges, and releases herein contained are a material inducement for Lender
entering into this Agreement, and constitutes an essential part of the
consideration bargained for and received by Lender under this Agreement.

3

--------------------------------------------------------------------------------

                9.     No Oral Agreements.   This written agreement, together
with the Loan Agreement and Related Documents which are incorporated herein by
reference, is the final expression of the credit agreement between the Borrower
and the Lender and may not be contradicted by evidence of any prior or
contemporaneous oral agreement between the Borrower and the Lender. Borrower,
Guarantor, and Lender each hereby affirm that there is no unwritten oral credit
agreement between Borrower and Lender with respect to the subject matter of this
written credit agreement.

                10.     Additional Documents.   The parties hereto agree to sign
any additional documents reasonably necessary to give effect to the terms of
this Agreement, if requested by Lender.

                11.     Guaranty.   Guarantor, by executing this Agreement,
consents to the terms herein contained, and acknowledges, confirms and agrees
that its Commercial Guaranty remains in full force and effect and constitutes
and remains a guaranty of the Notes, the Loan Agreement and the Related
Documents.

                12.     No Fiduciary Relationship.   Borrower acknowledges and
agrees that its relationship with Lender is a lending relationship only, and
that no fiduciary relationship exists between the parties. In entering into this
Agreement, Borrower has not relied upon any covenant, representation or warranty
by Lender as to the effect of this Agreement, including the tax effect of this
Agreement, other than those expressly set forth in this Agreement, and all such
other covenants, representations, and warranties are expressly disclaimed by
each of the parties.

                13.     Miscellaneous.

    a.   Headings are inserted into this Agreement for convenience only and
shall not be considered in construing any provision.

    b.   The laws of the State of Montana will govern all provisions of this
Agreement.

    c.   This Agreement may not be amended, nor any of its provisions waived,
except in a writing executed by all parties hereto.

    d.   Time shall be of the essence of the Agreement.

    e.   The provisions of this Agreement are separable. If any judgment is
hereafter entered holding any provision of the Agreement to be invalid or
unenforceable, then the remainder of the Agreement shall be carried out as
nearly as possible according to its original terms.

    f.   No inference in favor of, or against, any person shall be drawn from
the fact that such person has drafted all or any part of this Agreement or any
other Loan Document.

4

--------------------------------------------------------------------------------

                14.     Counterparts.   This Agreement may be executed in any
number of identical counterparts, any of which may contain the signatures of
less than all parties, and all of which together shall constitute a single
Agreement.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

5

--------------------------------------------------------------------------------

                15.     Successors.   The covenants, conditions and agreements
contained in this Agreement shall bind, and the benefits thereof shall inure to,
the respective parties hereto and their respective heirs, executors,
administrators, successors and assigns.

                IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day and year first above written.

  BORROWER:

  WESTMORELAND RESOURCES, INC.

  By: /s/ Morris W. Kegley         Name: Morris W. Kegley
Title: Vice President and General Counsel

  GUARANTOR:

  WESTMORELAND COAL COMPANY

  By: /s/ Doug Kathol         Name: Doug Kathol
Title: Vice President and Treasurer

  LENDER:

  FIRST INTERSTATE BANK

  By: /s/ Steve Tostenrud                Steve Tostenrud
Its:  Vice President

6

--------------------------------------------------------------------------------