Walter Energy buys river terminal

ALABAMA operator Walter Energy has inked a deal with a US Steel subsidiary under undisclosed terms to acquire the assets of Mobile River Terminal.
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An Alabama overland conveyor structure linking Walter Energy's operations. Courtesy Walter Energy.

Donna Schmidt

The facility is located at the Port of Mobile, about 4 miles from Walter’s McDuffie Terminal where its South American and European exports are shipped from.

"The Mobile River Terminal is of significant strategic importance to Walter Energy," interim chief executive officer Joe Leonard said.

"This acquisition will help ensure that we will have unconstrained shipping capacity to support our long-term coking coal production plans in Alabama. In addition, this facility should help maintain low mine-to-port costs and make us less reliant on third parties."

Both facilities are in strategic locations for Walter, allowing coal from its mines to be transported by either rail or barge.

Earlier this month, Walter finalized a $C3.3 billion ($US3.26 billion) merger with Vancouver-based Western Coal, creating a North American and global steelmaking coal giant.

The transaction, initially announced November 18, created the top publicly traded pure-play metallurgical coal producer in the world and will provide the newly combined company with access to the Pacific and Atlantic seaborne markets.

In total, the producer will hold 385 million tons of reserves, 20Mt or more of which it expects to mine annually by 2012.

The agreement has been unanimously approved by both companies' boards of directors and is expected to be completed by the second quarter of 2011.