Published: December 12, 2017 | Share This

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Contura Energy has sold two mines in Wyoming’s Powder River Basis to Blackjewel LLC.

The company sold its Eagle Butte and Belle Ayr mines along with reserves, equipment, infrastructure and other properties for deferred consideration up to $50 million through royalty payments, according to a written statement.

Combined, the two mines shipped 24.5 million tons of coal in the first three quarters of 2017. Contura subsidiaries controlled approximately 600 million tons of proven and probable reserves in the PRB.

Under the terms of the transaction, Blackjewel L.L.C. will assume all permit and reclamation obligations associated with the assets, which eliminates about $200 million in undiscounted reclamation obligations for Contura, according to the statement.

Additionally, subject to further calculation, this transaction is expected to generate significant income tax deductions of $400 million to $450 million for Contura, which would be available to offset taxable income in 2017 and future years. The company expects to incur a book loss on the sale, which will be recorded in the fourth quarter of this year.

“This transaction allows us to further sharpen our focus on the company’s well-positioned eastern assets and a growing met sales portfolio,” said Kevin Crutchfield, Contura’s chief executive officer. “While these PRB thermal assets will not be part of our company’s operational strategy moving forward, the purchaser is acquiring two solid mines with decades of minable reserves, a top-notch, professional workforce and a great operating track record. I appreciate and commend the contributions that current and past employees in the PRB made toward that success, and wish them the very best in the future.”

Contura will continue to maintain a diversified production profile comprised primarily of high-quality, metallurgical coal mines in Central Appalachia and its underground, longwall thermal coal mine in Northern Appalachia. Post-transaction, Contura affiliates control nearly 700 million tons of proven and probable reserves in Northern and Central Appalachia and maintain a 65 percent ownership interest in the world-class Dominion Terminal Associates (DTA) coal export terminal located in Newport News, Virginia.

“In the short 16 months since Contura’s launch, our management team and board have maintained diligent focus on three key operating goals — running safe, environmentally responsible, and productive mines, leveraging our trading and logistics platform to take advantage of a resurgent metallurgical coal market, and enhancing value for the company’s shareholders,” Crutchfield said.

Source: Bristol Herald Courier

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