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September 24, 2018updated 10 Nov 2021 5:01am

Peabody to buy Shoal Creek coal mine for $400m

Global pure-play coal firm Peabody has signed an agreement to purchase the Shoal Creek metallurgical coal mine located on the Black Warrior River in Central Alabama, US from Drummond, in a deal valued at $400m.

Global pure-play coal firm Peabody has signed an agreement to purchase the Shoal Creek metallurgical coal mine located on the Black Warrior River in Central Alabama, US from Drummond, in a deal valued at $400m.

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High-vol A coking coal produced at the Shoal Creek is supplied to Asian and European steel mills.

As part of the transaction, Peabody will acquire the mine, preparation plant and supporting assets.

Subject to certain conditions, including regulatory approvals, the transaction is anticipated to be completed by the end of this year.

Peabody president and CEO Glenn Kellow said: “Peabody has consistently outlined our intention to upgrade our metallurgical coal platform and make strategic investments using a strict set of filters.

“We believe the purchase of the well-capitalised and high-quality Shoal Creek Mine meets these filters, offers major logistical advantages and represents an opportunity to create significant value.

The transaction will add annual sales of around two million tonnes of high quality hard coking coal, which the company hopes will expand its met coal volumes and margins.

“Peabody has consistently outlined our intention to upgrade our metallurgical coal platform and make strategic investments.”

The company intends to leverage the location advantage of Shoal Creek, which has direct access to barge transportation, to serve growing demand markets.

Furthermore, the acquisition is expected to offer multiple synergies and seamless integration into Peabody’s operating and SG&A platforms.

Developed in 1994, the Shoal Creek mine has around 400 employees and the current mine plan accesses 17 million tons of reserves.

Shoal Creek, which uses longwall mining technology, had sales of 2.1 million tonnes last year.

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Dig deeper with our mining equipment forecasts

As ore mines ramp up and come on stream, the total number of active surface machines (including trucks, excavators, shovels, loaders, graders and dozers) is forecast to rise from 141,470 in 2020 to 167,367 by 2025. This will be a CAGR of 3.4% from 2020 to 2025. The largest contributor to this growth is expected to be trucks, particularly smaller-sized trucks with shorter lifespans, used extensively in parts of Asia Pacific. Underground mining equipment is similarly expected to see a CAGR of 2.3% in this same time frame, with the number of mining trucks and loaders/LHDs in active underground mines expected to rise to 19,853 by 2025. GlobalData’s extensive mine-site research and equipment models have been used to build a complete view of mobile mining equipment populations globally for trucks, loaders, graders, dozers, excavators and shovels. This report includes informative breakdowns by each major region and key mining country, and also by major commodity. Read GlobalData’s Global Surface and Underground Mining Equipment: Populations & Forecast to 2025 for a complete view of the market, allowing you to best position yourself for the future.
by GlobalData
Enter your details here to receive your free Report.

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