WHEELING -- Murray Energy Corp. will be acquiring five Consolidation Coal Co. mines including the McElroy, Shoemaker, Blacksville, Loveridge, and Robinson Run mining complexes in West Virginia, certain coal reserves, related river transportation and dock facilities, and other assets. The deal has a total value of $3.5 billion.
"No company has developed a better legacy with its employees, with its customers, with the financial markets, with the regulatory agencies, or with the public in general, over many decades, than has Consol and Consolidation Coal," said Robert E. Murray, chairman, president and CEO of Murray Energy. "Murray Energy intends to preserve this well-earned legacy."
Murray will pay $850 million in cash $184 million in value of future payments, and assume $2.4 billion in retirement liabilities from Consol.
J. Brett Harvey, Consol's chairman and CEO, said the sale "further's Consol's ... growth strategy."
"The sale of these five mines assets that have long contributed to America's economic strength and our company's legacy was a very difficult decision for our team. The employees at these mines are among the safest and most productive miners anywhere in the world. In the end, we concluded that the time had come to sell these mature assets to ownership whose strategic direction is more aligned with those mines," he said.
Consol said in a release that the five mines together produced 28.5 million tons of thermal coal in 2012. Murray Energy is acquiring approximately 1.1 billion tons of Pittsburgh No. 8 seam reserves.
Consol will keep some mining assets. The move also allows the company to continue focusing on its natural gas division.
Murray Energy currently operates six underground longwall mining systems and 23 continuous mining units. Consolidation Coal operates an equal number of each. Further, Murray Energy builds virtually all of its own mining machinery, including the longwall systems.
"With our expertise, we will be able to efficiently operate the acquired Consolidation Coal mines and provide their employees with an opportunity for long term employment," said Robert D. Moore, executive vice president, chief operating officer, and chief fFinancial oOfficer of Murray Energy.
"Most especially, Murray Energy operates safe coal mines, with a particular emphasis on fire protection. This will help assure the protection of the health and safety of our new employees," Murray added.
The acquisition will more than double Murray Energy's total employment, from 3,300 to 7,100 workers. The company also will about double its annual coal production, from 30.1 million tons to a combined 58.6 million tons.