Consol Energy to sell Buchanan mine in US for $420m

29 February 2016 (Last Updated February 29th, 2016 18:30)

Consol Energy has signed an agreement for the sale of its Buchanan mine in southwestern Virginia, US, and other metallurgical coal reserves to Coronado IV for $420m.

Consol Energy has signed an agreement for the sale of its Buchanan mine in southwestern Virginia, US, and other metallurgical coal reserves to Coronado IV for $420m.

As part of the deal, the company is also selling its idled Amonate mine, greenfield Russell County coal reserves and greenfield Pangburn-Shaner-Fallowfield coal reserves in the US.

Consol Energy president and CEO Nicholas DeIuliis said: "This is another significant event in the execution of Consol Energy's strategy, as well as a meaningful step in continuing to strengthen our balance sheet.

"The Buchanan Mine fits into Coronado's portfolio as a pure play metallurgical coal producer, and, in the end, this transaction bolsters the strategic position of both companies."

"This is another significant event in the execution of Consol Energy's strategy, as well as a meaningful step in continuing to strengthen our balance sheet."

The transaction includes about 400 million tonnes of proved coal reserves which includes about 88 million tonnes that are associated with the Buchanan mine.

Under the transaction, the right to extract and sell gas at the mines and other properties would be retained by Consol.

The completion of the transaction is subject to customary conditions, including regulatory approvals and is expected to close in the first quarter of 2016.

Metallurgical coal company Coronado IV is backed by EMG, a private equity firm that specialises in energy and mining.

EMG has about $16.5bn of regulatory assets under management and is funding the transaction.