Mohegan secures $100m to buy coal operation in West Virginia, US

18 May 2018 (Last Updated May 18th, 2018 10:53)

Mohegan Energy Trustees has acquired a metallurgical coal operation in West Virginia, US, from independent coal operator Met Resources.

Mohegan Energy Trustees has acquired a metallurgical coal operation in West Virginia, US, from independent coal operator Met Resources.

Supported by a $100m facility, the acquisition of the low-volume coal operation was made through Mohegan’s subsidiary Cornerstone Minerals and includes associated equipment.

Mohegan is planning to increase production, reduce costs and improve existing infrastructure.

The company also intends to construct a 350t/h processing plant and a rail out facility.

“Our partnership with Orion Energy provides Mohegan with the long-term strategic and financial support we need to safely and efficiently maximise the value of our acquisition.”

Mohegan has signed a partnership deal to secure financing for the transaction from private equity firm Orion Energy Partners.

Proceeds from the funding will be used to finance the acquisition and related infrastructure investments.

Mohegan Energy Trustees managing partner Rick McCormick said: “Our partnership with Orion Energy provides Mohegan with the long-term strategic and financial support we need to safely and efficiently maximise the value of our acquisition.”

McCormick has expertise in coal processing techniques and is set to oversee Mohegan’s commercial activities.

Orion Energy co-founder and managing partner Gerrit Nicholas said: “Mohegan’s management is well-positioned to implement industry-leading extraction and polishing techniques and assure exceptional performance during this critical time of rising metallurgical demand.

“Orion Energy expects to quickly deploy the $100m facility to support the modernisation and expansion of the Mohegan mines to maximise production while assuring the highest quality and safest operational practices.”

The private equity firm provides capital solutions to North American middle-market energy infrastructure businesses.