Magnum will produce and market Central Appalachian low-sulfur coal.
Arch Coal will hold about 37.5% ownership in Magnum, while ArcLight Capital will retain 62.5% of the interests.
Four of Arch’s West Virginia operations will be involved in the Magnum deal, while ArcLight will contribute Trout Coal, a group of coal sales and mining organisations.
ArcLight’s contributions will include the Panther, Remington, Dakota and Jupiter mines and Arch will contribute Samples, Hobet 21 and West Virginia’s Arch. The mines have a collective production of about 21 million tonnes last year.
Arch will retain ownership of its Mingo Logan, Lone Mountain, Pardee and Coal-Mac facilities, as well as the Mountaineer II mine in Logan County, West Virginia, and neighboring Spruce.
Arch Coal was established after Arch Mineral and Ashland Coal joined forces in a 1997 merger. Trout Coal Holdings was formed in 2001 by ArcLight and Cline Resource & Development.