Consol offloads Canadian coal

CONSOL Energy has sold $129 million of coal assets in Alberta, Canada.
Consol offloads Canadian coal Consol offloads Canadian coal Consol offloads Canadian coal Consol offloads Canadian coal Consol offloads Canadian coal

Consol chief executive J Brett Harvey. Courtesy Consol Energy.

Justin Niessner

The deal, settled in the closing days of 2012, involves two transactions. This includes the sale of the 30 million ton Grassy Mountain surface mine and properties known as Ram River and Scurry Ram, estimated to have 380Mt of in-situ coal and 75Mt of washed coal.

The Ram River and Scurry Ram properties were sold for $105 million to Canadian resource bank Forbes & Manhattan, parent company of the South Africa-focused miner Forbes Coal.

As part of the arrangement, Consol has retained the right to receive up to $20 million in common shares of Ram River Coal, the company set up by Forbes to make the acquisition.

With finalization of the deal, Ram River Coal closed a share offering for proceeds of $85 million and expects to close a second tranche of the offering for an additional $20 million before January 31.

Sale of Grassy Mountain is expected to be closed with Australia-based Riversdale Resources for $24 million in the second quarter of 2013.

“These two sales represent a continuation of our successful strategy of pulling value forward and focusing on our near-term opportunity set,” Consol chairman and chief executive J Brett Harvey said.

The transactions push Consol’s total asset sales for 2012 over $350 million.

The company notes that none of the assets sold in 2012 generated revenue during the year and it expects to sell additional non-core assets in 2013.

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