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NRP, Cline wraps up Deer Run deal

NEARLY three years after closing the first of a six-phase coal reserve acquisition deal from Clin...

Donna Schmidt
NRP, Cline wraps up Deer Run deal

The last phase of the $US255 million deal initially announced in September 2009 was closed this week for $40 million via its credit and gives NRP a combined total of approximately 200 million tons.

The Deer Run mine near Hillsboro, Illinois, has a production capacity of 7 to 9Mt per year once the longwall is in full production.

NRP’s revenue the first half of 2012 alone was $2.9 million, linked to about 630,000t of development coal.

The penultimate reserve transaction was sealed in February for $40 million cash; the fourth reserve acquisition was in mid-January 2011 and totaled $55 million.

The very first acquisition in 2009 was 3.3Mt, for which it paid $10 million.

“The Deer Run mine will be one of the lowest cost underground coal mines in the country with access to four different railroads and the river markets which bodes well for the marketing of this coal in any type of market conditions,” NRP president and chief operating officer Nick Carter said.

Deer Run’s coal reserves are leased to Cline affiliate Hillsboro Energy, which is continuing development at the operation.

With a lifespan anticipated to exceed two decades, NRP said earlier this year it hopes to gain more than $40 million per year in income from the complex.

Production from NRP properties accounts for 25% of all metallurgical coal produced in the US, and 5% of the nation’s coal is produced at the company’s properties, according to the producer’s data.

At the start of this year, according to state data, Illinois had 19 mines, including 11 underground.

In 2009, the group noted that Deer Run’s permit was the region’s first since 1982, when the state Department of Natural Resources gave the go-ahead to what is now the Viper operation.

According to the group’s most recent statistics, production in Illinois has been at 32-33Mt annually since 2000.

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