Consol Energy to sell Buchanan Mine for $420M
CANONSBURG – Consol Energy is continuing its strategy of divesting its coal-mining assets, announcing a sales agreement Monday for a number of its metallurgical coal assets.
Consol said Monday that it is selling its Buchanan Mine in southwestern Virginia and other metallurgical coal reserves to Coronado IV LLC for $420 million.
According to a news release form the Southpointe-based energy company, the transaction includes $398 million cash payable at closing, and is not subject to financing.
Consol said the transaction is being funded by Energy and Minerals Group, the management company for a series of specialized private equity funds.
EMG has approximately $16.5 billion of regulatory assets under management.
“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,” said Nicholas J. DeIuliis, Consol president and chief executive officer. “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.”
Also included in the transaction are Consol’s idled Amonate Mine in southern West Virginia and southwestern Virginia, its greenfield Russell County coal reserves in southwestern Virginia and its greenfield Pangburn-Shaner-Fallowfield coal reserves in Southwestern Pennsylvania. The transaction includes approximately 400 million tons of proved coal reserves, which includes approximately 88 million tons associated with the Buchanan Mine.
Consol said the transaction does not include any gas rights, and it will retain the right to extract and sell gas at the mines and other properties.
Consol said it expects to use transaction proceeds to pay down debt. The sale is expected to close in the first quarter of 2016.
Also in conjunction with the sale, Consol said it is realigning its dividend policy to further reflect the company’s increased emphasis on growth. Beginning with the first declared quarterly dividend after the transaction closes, Consol said it intends to suspend its regular quarterly dividend.