Published: December 14, 2020 |

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Contura Energy has closed on its transaction with Iron Senergy Holding for the divestment of the Cumberland Mine and related assets in Greene County, Pennsylvania.

The subsidiaries that hold the Cumberland and Emerald mines and the associated coal reserves, mining permits and operations, infrastructure, equipment, and transloading facilities have transferred to Iron Senergy. According to the terms of the transaction, Iron Senergy has acquired all of the equity of the following subsidiaries previously owned by Contura: Emerald Contura, Cumberland Contura, Contura Coal Resources, Contura Pennsylvania Land, and Contura Pennsylvania Terminal. Iron Senergy has also posted replacement reclamation bonds for the Pennsylvania entities and assumed their UMWA collective bargaining agreements.

Additionally, the closing of this transaction released Contura from all reclamation obligations associated with the Pennsylvania Entities, which are estimated to be approximately $169 million of undiscounted future cash outflows. These obligations have been assumed by Iron Senergy.

“This mutually beneficial transaction with Iron Senergy extends the runway for Cumberland under its new ownership, and today’s closing is the culmination of many months of hard work from our respective teams. I commend everyone who worked on this project for their efforts to bring this to fruition,” said David Stetson, Contura’s chairman and chief executive officer.

“The transaction is a transformational milestone in Contura’s history, fulfilling our vision of moving swiftly to sharpen our company’s focus on producing metallurgical products used in steelmaking. At the same time, dramatically reducing our portfolio’s thermal coal production will yield financial benefits to Contura by significantly reducing our asset retirement obligations and collateralization requirements. Today marks a big step forward for our company,” added Stetson.

Iron Senergy has expressed its intention to continue operating the Cumberland Mine beyond 2022, thereby extending employment opportunities for the Cumberland workforce, providing a continued tax base for the local community and sustaining business opportunities for Cumberland’s vendors and a reliable fuel supply for customers.

Cumberland’s mine management and sales agent will remain with the Cumberland operations under Iron Senergy’s new structure.

“Our team is excited about taking over mining operations at Cumberland and extending the operation’s expected lifespan. We plan to keep the mine running and continue providing employment opportunities for the talented workforce at the mine,” said Mike Castle, Iron Senergy’s chief financial officer.

Upon the transaction’s closing, Contura provided $20 million in cash consideration to Iron Senergy and transferred $30 million in existing cash collateral to Iron Senergy’s surety provider as collateral for Iron Senergy’s replacement reclamation bonds. Contura retained a large block of Freeport seam metallurgical-grade coal reserves, located near the Cumberland and Emerald properties for potential future development.

It is not clear what kind of entity Iron Senergy is. Nothing public is available about the new company, which was incorporated in Delaware in July. Contura also did not provide details.

About Contura Energy
Contura Energy is a Tennessee-based coal supplier with affiliate mining operations in Virginia and West Virginia. With customers across the globe, high-quality reserves and significant port capacity, Contura Energy reliably supplies metallurgical coal to produce steel.

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