Contura Sells PRB Assets to Blackjewel
Under the terms of the transaction, Contura will receive deferred consideration of up to $50 million through various royalty payments. Blackjewel will assume all permit and reclamation obligations associated with the assets acquired, thereby eliminating approximately $200 million in undiscounted reclamation obligations for Contura. This transaction is expected to generate significant income tax deductions of approximately $400 million to $450 million for Contura, which would be available to offset taxable income in 2017 and future years. The company expects to incur a book loss on the sale, which will be recorded in the fourth quarter.
“This transaction allows us to further sharpen our focus on the company’s well-positioned eastern assets and a growing met sales portfolio,” said Kevin Crutchfield, CEO, Contura Energy. “[Blackjewel] is acquiring two solid mines with decades of minable reserves, a topnotch, professional workforce and a great operating track record.”
Contura’s production profile will now consist primarily of metallurgical coal mines in Central Appalachia and its underground, longwall thermal coal mine in Northern Appalachia. The company will still control nearly 700 million tons of proven and probable reserves in Northern and Central Appalachia and a 65% ownership interest in the Dominion Terminal Associates (DTA) coal export terminal, located in Newport News, Virginia.