NRP moves into Ohio, Pennsylvania

NATURAL Resource Partners expects to reap handsome royalties through the end of the decade from its purchase of coal reserves being mined by the Enlow Fork operation.

Staff Reporter

NRP paid $US29 million for 179 million tons of reserves in Ohio and Pennsylvania, purchased from subsidiaries of American Financial Group and previously part of the Penn Central Transportation Company.

A large portion of the south-west Pennsylvania property is leased to Consol Energy, which is mining the Pittsburgh seam at Enlow Fork. The Ohio and Central Pennsylvania reserves are under lease to other operators and will be mined in the future.

Over the rest of the year the deal is expected to return around $US1.8 million in coal royalty revenues based on approximately 1 million tons of coal production. Next year this figure will jump to $US5.8 million from 3.3Mt of production.

Stable cash flows are expected through the end of this decade, NRP said.

"We are using our financial strength to assure our ability to continue to increase distributions over the long-term," said NRP chairman Corbin J Robertson.

"This acquisition exemplifies the kind of diversity we seek at NRP: two new states, a large amount of high BTU, medium sulfur coal, new markets, six new lessees, and more opportunities to expand," said president Nick Carter.

Huntington, West Virginia-based NRP is a master limited partnership which owns and manages coal properties in the three major US coal producing regions - Appalachia, the Illinois Basin and the Powder River Basin.