SunCoke Energy has sold its coal mining business to the US-based Revelation Energy in a deal that includes costs related to all of the remaining coal mining assets, mineral leases, real estate and mining reclamation.
Revelation acquired the mining assets that are primarily based in Buchanan and Tazewell counties in southwest Virginia.
Under the deal, Revelation Energy will receive approximately $10.3m from SunCoke in order to own the assets and associated costs.
In conjunction with the deal, Revelation Energy and SunCoke’s Jewell Coke operations have also signed an agreement.
As per the agreement, Revelation will supply about 300,000t of coal per year to Jewell Coke for the next five years.
SunCoke also expects to incur approximately $2m of costs that are associated with the transaction.
SunCoke Energy chairman, president and CEO Fritz Hendersonsaid: "Despite our aggressive efforts to reduce costs by rationalising our mining footprint, the drastic and sustained decline in coal prices will likely prevent us from generating positive cash flow from our mining operations for the foreseeable future.
"We believe this value-positive sale will improve our long-term cash flow and allow us to focus on our core cokemaking and coal logistics businesses."
SunCoke’s first cokemaking operation, the Jewell facility opened in 1960 and produced 450,000 short tonnes per year in 1969. By late 1970s the output increased to 530,000 short tonnes.
Since then, the facility has increased coke making capacity to more than 700,000t per year.