Ram River Coal Corp., a closely held Canadian company whose investors include the Lundin family, bought non-producing metallurgical-coal assets in Alberta from U.S. miner Consol Energy Inc. (CNX) for $105 million.
Ram River Coal was created by Canadian bank Forbes & Manhattan Inc. to buy the Ram River and Scurry Ram assets, Canonsburg, Pennsylvania-based Consol said in a statement today. In connection with the deal, Ram River raised $85 million selling shares to Liberty Mutual Insurance Co. and companies controlled by Lundin family trusts, and it plans to raise another $20 million in January, Consol said.
Consol, the most valuable U.S. coal producer, said it also agreed to sell assets including the non-producing Grassy Mountain surface mine in Alberta to Australia’s Riversdale Resources for $24 million.
The U.S. company is selling some assets in order to focus on developing gas wells and its producing coal mines. Consol posted a $11.4 million third-quarter loss after coal prices and shipments fell. In western Pennsylvania, Consol’s Bailey mine extension -- which it also refers to as BMX -- is planned to begin production in early 2014.
The sales announced today are “helping to fund exploration and production growth and the BMX mine development, both of which will generate cash flow and solid returns,” said Jim Rollyson, a Houston-based analyst at Raymond James Financial Inc.
To contact the editor responsible for this story: Simon Casey at email@example.com