Consol Energy Sells Virginia Mine and Coal Reserves to Coronado IV
- Mar 02, 2016
Buchanan, Va.—Consol Energy Inc. has signed a deal that will leave it nearly half-a-billion dollars richer. The coal and natural gas company has agreed to sell its Buchanan Mine in Buchanan, Va., to Coronado IV LLC for $420 million.
It’s a part-cash arrangement, and the cash part is sizeable: $398 million. As for Coronado, it will get its money’s worth with Buchanan Mine, which produced 4.3 million tons of coal in 2015. “Our Buchanan Mine posted strong cost reduction sequentially and is likely the only [metallurgical] mine generating a profit in the United States at these low met price levels,” David Khani, CFO of Consol, said during the company’s fourth quarter 2015 earnings call in January.
Additionally, the deal includes Consol’s greenfield Russell County coal reserves in southwestern Virginia; Pangburn-Shaner-Fallowfield coal reserves in southwestern Pennsylvania; and, straddling southern West Virginia and southwestern Virginia, the Amonate Mine complex, which was idled by Consol in 2012.
Proceeds from the sale of Buchanan and the other metallurgical coal reserves will be used for the paying down of debt. “This is another significant event in the execution of Consol Energy’s strategy, as well as a meaningful step in continuing to strengthen our balance sheet,” Nicholas DeIuliis, Consol CEO, said in a prepared statement.
If all goes as planned, the deal will close during the first quarter of 2016.