Blackhawk Mining Buys James River Coal

A federal judge in late August approved the $52 million sale of nearly a dozen U.S. coal mines and related facilities owned by James River Coal Co. to a subsidiary of Lexington, Kentucky-based Blackhawk Mining LLC, which had won a bankruptcy court-sanctioned auction for the assets. James River and 33 affiliates filed for Chapter 11 bankruptcy reorganization in early April listing more than $800 million in debt and $1 billion in assets after enduring a turbulent past couple of years marked by operating losses and production cutbacks. Together, mines included in the sale employ about 900 people and are capable of producing more than 7 million tons of coal annually. Three prep plants and two loading facilities also were included in the deal.

The James River sale culminates a busy 2014 for Blackhawk, a Central Appalachian coal producer. Early this year, Blackhawk expanded its presence in Central Appalachia by acquiring four active thermal coal surface mines in eastern Kentucky for $26.3 million in cash from Arch Coal Inc. Those mines were the East-Mac and Nellie, Bearville, Thunder Ridge and Rowdy Gap operations. Also included was the Teton prep plant and Kentucky River loading facility.

With that acquisition, Blackhawk had expected to produce about 2.3 million tons of coal this year. Now, thanks to the James River sale, Nick Glancy said Blackhawk is anticipating annual output of more than 9 million tons a year of mostly thermal coal, but also some metallurgical and PCI coal. “We have focused on low-cost thermal coal in Central Appalachia as well as specialty coal in Central Appalachia,” he said. “This transaction gives us a little more in specialty coal, it helps in our specialty coal market, and we now have exposure to met coal in Hampden.”

Through Triad Mining, the sale also marks Blackhawk’s entrance into the high-sulfur Illinois Basin, the fastest growing coal basin in the U.S. Triad operates several surface mines and one underground mine, turning out more than 2 million tons annually.

In October 2012, Blackhawk purchased Pine Branch Coal Sales, which had operated three surface mines in Perry County, Kentucky. Blackhawk was formed in 2010 in the wake of the Black Diamond Mining bankruptcy in eastern Kentucky.
As featured in Womp 2014 Vol 09 - www.womp-int.com