NRP picks up fifth Deer Run reserve

MASTER limited partnership Natural Resource Partners has completed its fifth and penultimate coal reserve acquisition from Colt, a division of the Cline Group, at the Deer Run complex in the Illinois Basin for $US40 million cash.
NRP picks up fifth Deer Run reserve NRP picks up fifth Deer Run reserve NRP picks up fifth Deer Run reserve NRP picks up fifth Deer Run reserve NRP picks up fifth Deer Run reserve

A Natural Resource Partners property. Courtesy NRLP

Donna Schmidt

NRP has now paid $215 million of the $255 million slated for the deal, which includes about 200 million tons of coal reserves in Montgomery and Bond counties near Hillsboro, Illinois.

The company’s final acquisition will also carry a $40 million price tag and align with the completion of the longwall’s first pass, which is scheduled for August.

The fourth reserve acquisition was in mid-January 2011 and totaled $55 million.

The multi-phase transaction for Deer Run was initially announced by NRP in September 2009, when it signed a definitive agreement for the reserves.

The first acquisition was 3.3Mt for which it paid $10 million.

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

Last year, the company said the mine was forecast to produce 8-10Mt at full production with the longwall in operation.

With a lifespan anticipated to exceed two decades, NRP hopes to gain more than $40 million per year in income from Deer Run.

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.

Illinois has 19 mines, including 11 underground, according to the Illinois Coal Association.

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.

Most read Archive

loader

Most read Archive