Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Alpha Sells Coal Assets, Bets Again on Gas Deal Expected to Net $75 Million in Cash

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Alpha Sells Coal Assets, Bets Again on Gas Deal Expected to Net $75 Million in Cash

Article excerpt

Alpha Natural Resources, a Virginia-based company and one of the country's largest metallurgical coal producers, said Thursday it will sell a large chunk of its Pennsylvania operations to Kittanning-based Rosebud Mining Co.

In an $86 million deal, Alpha has agreed to sell substantially all the assets of its Latrobe subsidiary Amfire Mining Co LLC. The transaction is expected to close before the end of the year and yield $75 million in cash.

According to the Mine Safety and Health Administration, Amfire has five surface mines, four facilities such as coal preparation plants, and five underground mines in Pennsylvania. Amfire mines, located in seven central Pennsylvania counties, produced about 1.7 million tons of coal, of which 1.2 million is metallurgical coal, during the first nine months of 2014.

Rosebud is a privately-held coal company, whose president, Cliff Forrest, owned the now-bankrupt Freedom Industries. Freedom Industries leaked chemicals into the Elk River in January, contaminating water supplies that served 300,000 West Virginians.

Rosebud has 18 underground mines in Pennsylvania and four in Ohio. It also has three surface mines and 11 other facilities, mostly in Pennsylvania. The company sells both thermal and met coal.

Alpha's CEO Kevin Crutchfield told analysts Thursday that while Amfire's assets were fetching some of the higher prices the company was seeing, "It was regionally disparate from other assets that we have and there are some other regional operators up there that expressed an interest in it."

Over the past year, Alpha has looked to cut costs as coal producers across the country struggle with low prices for both thermal coal, which is burned in powerplants, and metallurgical coal, which is used in steelmaking. …

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