CONSOL Energy is to pay Southeastern Land LLC, a Kentucky company registered to long-time coal entrepreneur James Booth, US$44 million to take two West Virginia coal mines off its hands as the company continues its transition away from coal.
The deal will see Southeastern Land take over the Miller Creek and Fola mining complexes, assuming closing and reclamation liabilities of US$103 million. The mines have 114 million short t of owned and leased coal reserves. Miller Creek produced 2.1 million short t of coal in 2015 from an opencast mining operation; Fola is currently closed.
CONSOL said it would pay Southeastern Land US$27 million on closing with a further US$17 million to be paid in instalments over the next four years in order to “equalise the value exchange”.
According to CONSOL spokesperson Brian Aiello, the deal with Southeastern Land represents the final part of the Pittsburgh-based company’s divestment strategy. Speaking to the Pittsburgh Post-Gazette, Aiello said the deal “exits us from Central Appalachia and surface mining and the associated risk profile.”
CONSOL began life in 1864 as Consolidation Coal Co. and retains a stake in the Bailey mining complex in southwestern Pennsylvania, which is operated by its spin-off CNX Coal Resources. However, over recent years the company has worked to evolve into an oil and gas exploration and production (E&P) company, following its purchase of Dominion Resources, an E&P company active in the Marcellus Shale in 2010.
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/27072016/consol-pays-us44-million-to-divest-coal-mines-2016-2093/