Horizon gets its buyer

HORIZON Natural Resources have finally found a buyer for its coal assets with Massey Energy agreeing to buy Horizon subsidiaries Starfire and Cannelton for US$10 million in cash, plus assumption of related property reclamation liabilities of between $30 to $45 million.

Angie Tomlinson

Massey made the purchase at the Horizon Natural Resources Company bankruptcy court auction. Massey was part of a group led by financier Wilbur Ross which won the auction for the assets with a bid totaling $786 million.

Horizon will acquire assets of Starfire, located in Perry County, Kentucky, and Cannelton, located in Kanawha County, West Virginia, which includes an estimated 15 to 20 million tons of low sulfur coal reserves, two preparation plants, a barge loading facility, related infrastructure and selected mining equipment.

"The Starfire assets are an excellent addition to our Kentucky reserve base and the Cannelton assets provide direct access to river transportation," said Massey CEO Don Blankenship.

The Horizon bankruptcy case has been plagued with controversy since Horizon endeavored to shed its union contracts to make its assets more attractive to buyers.

Despite protests outside the courthouse and a fervent campaign by the United Mine Workers of America (UMWA), a federal bankruptcy court judge ruled in favor of Horizon to void its union contracts, a decision that eliminated medical coverage for thousands of coal miners.

UMWA blasted the sale of two mines to a coal company it fears will block union membership.

"These [Starfire and Cannelton] are both established UMWA operations and we will fight to ensure they remain so," said UMWA international president Cecil Roberts.

Horizon filed for bankruptcy in November 2002. The company's assets, valued at less than $1 billion, are being sold in an attempt to satisfy about $1 billion in debts and other obligations.

Massey will close on the transaction prior to December 31, 2004.

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