Massey snaps up Appalachian Fuels assets

APPALACHIA-focused producer Massey Energy has completed the purchase of West Virginia metallurgical coal holdings and assets from the now-bankrupt Appalachian Fuels.
Massey snaps up Appalachian Fuels assets Massey snaps up Appalachian Fuels assets Massey snaps up Appalachian Fuels assets Massey snaps up Appalachian Fuels assets Massey snaps up Appalachian Fuels assets

Courtesy of Massey Energy.

Donna Schmidt

The company said Thursday that the assets, which were acquired through individual coal lease transactions, included 23 million tons of reserves. Massey also received a permitted preparation facility and refuse area, permitted deep and surface mines, infrastructure and some mining equipment in the deal.

The terms of the deal were not disclosed.

The holdings are located in Fayette County, near Massey’s operating Nicholas Energy and Mammoth complexes, and more than half of the reserves are high-quality metallurgical coal from the Eagle and Powellton seams.

Massey said it would resume mining from the Powellton seam “within a few months” and process the output at the Mammoth preparation plant. The other obtained assets, including the idle surface and deep operations, will be revived as market conditions warrant.

"We are very pleased with this acquisition and expect it to be almost immediately accretive to earnings," Massey president Baxter Phillips Jr said.

"We have already included additional metallurgical coal sales from the acquired mines in our plans for 2010. In the longer term, we expect the permitted preparation plant and refuse area to provide us with further opportunities for developing Massey acquired and controlled coal reserves in the surrounding region."

Massey has a history of acquisitions in the Appalachian region, with its reserves having spiked from 767Mt in 1987 to 2.3 billion tons today. It holds the largest metallurgical coal reserves in the US with 1Bt.

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