The Times West Virginian

Local News

October 28, 2013

CONSOL to sell 5 mines for at least $850M in cash

MORGANTOWN — CONSOL Energy Inc. said Monday it is selling all five of its longwall coal mines in West Virginia to a subsidiary of Ohio-based Murray Energy for a deal that includes $850 million in cash.

Chairman and Chief Executive Officer J. Brett Harvey said the sale of the Consolidation Coal Co. subsidiary was a difficult decision but is good for the company’s long-term growth and allows CONSOL to focus more on natural gas exploration and development.

CONSOL is selling the McElroy, Shoemaker, Robinson Run, Loveridge and Blacksville No. 2 mines, which produced a combined 28.5 million tons of thermal coal last year. The transaction also includes river and dock operations with a fleet of 600 barges and 21 towboats.

The deal also gives Murray Energy about 1.1 billion tons of coal reserves.

Murray Energy is taking some $2.4 billion in liabilities off CONSOL’s balance sheets, Harvey said, including $2.1 billion in post-retirement benefit plans, $105 million in workers’ compensation payments, $61 million in contributions to the Coal Workers’ Pneumoconiosis or black lung fund, and $13 million in long-term disability costs.

Murray Energy is also absorbing $149 million in environmental costs and is taking on CONSOL’s pension obligations with the United Mine Workers of America. Harvey said that agreement requires contributions of about $33 million per year.

UMWA President Cecil Roberts said the sale “changes nothing” for some 2,800 active hourly workers at the five mines.

“Our collective bargaining agreement does not go away with this transaction,” he said, “and our members remain covered by its provisions. There will be no changes in pay, benefits, insurance, schedules, working conditions, safety provisions, grievance procedures or any other language in the contract.”

Some 23,000 retirees, dependents and surviving spouses are also affected by the sale, which Roberts said is just one of many in the nation’s coalfields.

“It’s not the first time coal mines have been sold to new owners, and it won’t be the last,” he said.

Harvey called the West Virginia employees “among the safest and most productive miners anywhere in the world.”

“In the end,” he said, “we concluded that the time had come to sell these mature assets to ownership whose strategic direction is more aligned with those mines.”

Robert Murray, chairman of Murray Energy, said no company has developed a better relationship with its employees, customers and regulators than CONSOL.

“Murray Energy intends to preserve this well-earned legacy,” he said.

CONSOL said it is keeping its flagship Buchanan Mine in Virginia, the Miller Creek Mining Complex in southern West Virginia and its low-cost Pennsylvania operations, the Bailey, Enlow Fork and soon-to-be-completed BMX mines.

CONSOL said it’s also retaining royalties on some coal reserves, as well as water treatment payments and tolling fees at its Baltimore Terminal. The company expects to record a pretax gain of $1.3 billion on its fourth-quarter results, assuming the deal closes by Dec. 31.

Murray Energy also owned the Crandall Canyon mine in Utah when it collapsed in 2007 and killed nine people, including three rescuers. Six miners remain permanently entombed. Six other people were seriously injured.

But Murray said his company “operates safe coal mines, with a particular emphasis on fire protection.”

“This will help assure the protection of the health and safety of our new employees,” he said.

Murray has deep ties to West Virginia. In 2009, he gave West Virginia University $1 million for research into mining methods and use of fossil fuels. Though he graduated from Ohio State, Murray sent three sons to WVU to earn degrees in mining engineering and geology and is considered a longtime friend and supporter of the school.

Murray Energy said the transaction will nearly double its coal production from 30.1 million tons to 58.6 million tons per year, and nearly triple its coal reserves from 859 million tons to almost 2.4 billion tons. The work force will more than double, from 3,300 to 7,100 employees.

Murray said his company will be able to better serve coal-fired power plants “with reliable and low-cost coal supplies.”

For CONSOL, the deal means the flexibility to grow its natural gas operations and extend its production targets beyond 2014.

Harvey said West Virginia will continue to play an important role in the company’s future because CONSOL has a significant footprint in the state’s Marcellus shale fields. It is projecting a 30 percent increase in gas production in 2015 and 2016.

After the sale, CONSOL plans to reduce administrative expenses by $65 million per year. Details have yet to be announced.

1
Text Only
Local News
  • 041814 Fishing 2.jpg Fun, prizes mark annual event at Curtisville Lake

    An annual family fishing event begins at 9:30 a.m. today.
    The Marion County Parks and Recreation Commission and the West Virginia Division of Natural Resources are having the annual Family Fishing Day. The event will take place today at Curtisville Lake, with registration beginning at 9:30 a.m. and prizes being given away at 10:30 a.m.

    April 18, 2014 1 Photo

  • Police: Shooting of boy accidental

    A boy remains in critical condition after being shot more than a week ago, and police officials are now saying the incident was accidental in nature.
    On Wednesday, April 9, at 7:52 p.m., police were dispatched to a Fairmont residence after an 11-year-old boy sustained a gunshot wound inside the home.

    April 18, 2014

  • FGH oncology to benefit from cleanup

    Proceeds from this year’s town cleanup and recycling in White Hall will go toward comforting local cancer patients.
    During Monday’s council meeting, recorder Charlie Mason said the town will hold its annual cleanup from 7 a.m. to noon Saturday, May 3, at Fabric and Foam in White Hall. He said only White Hall residents may bring their garbage to throw away, but any Marion County resident may bring metal (excluding computers, televisions and tires) to recycle.

    April 18, 2014

  • Pleasant Valley approves phase two of cemetery project

    Pleasant Valley City Council approved phase two of a project to fence in Samuel Linn Cemetery in Benton’s Ferry at the council meeting Tuesday.
    The cemetery was started in 1852, with the death of Samuel Linn.

    April 18, 2014

  • UPDATE: Police say 11-year-old shot in 'accidental discharge of a firearm'

    A boy remains in critical condition after being shot more than a week ago, and police officials are now saying the incident was accidental in nature.

    April 17, 2014

  • Attorney General - CB.jpg Morrisey wants to work with all to ‘help transform West Virginia’

    State Attorney General Patrick Morrisey wants to work with citizens to “help transform West Virginia.”
    Morrisey was the guest speaker for the Marion County Chamber of Commerce’s “Lunch and Learn” event Wednesday at the Mon Power headquarters, located in the I-79 Technology Park in Fairmont. His trip to the Friendly City followed a town hall meeting in Harrison County Tuesday night.

    April 17, 2014 1 Photo

  • Behind-the-scenes emergency workers honored

    The Marion County Commission is recognizing the individuals who work behind the scenes when an emergency happens.
    During Wednesday’s meeting, commissioners signed a proclamation for National Public Safety Tele-Communicator’s Week in Marion County. The proclamation recognizes individuals working at the Marion County 911 Center.

    April 17, 2014

  • Wallace residents plead guilty to fishing violations

    Two Wallace residents were cited for and pleaded guilty to trout fishing violations.
    Michael Earl Fetty, 70, and Tammy K. Fetty, 46, were issued citations for exceeding possession limit of trout and conspiracy to violate Chapter 20 of the West Virginia State Code.

    April 17, 2014

  • Military Kids 1 - CB.jpg Military children honored for their sacrifices: PHOTOS

    Military children were honored for their sacrifices Tuesday at the Hershel “Woody” Williams Fairmont Armed Forces Reserve Center.
    The event was planned to coincide with Purple Up! Day, a nationwide initiative that encourages everyone to wear purple in honor of military children across the country.

    April 16, 2014 4 Photos

  • Child health: ‘Room for improvement’

    Children living in Marion County are doing better in some respects than children in other counties in the state, according to a national study released Tuesday.
    “The 2013 West Virginia Kids Count Data Book,” published by the Annie E. Casey Foundation, compares states and their counties to each other and to the national average of various areas of child health.

    April 16, 2014

Featured Ads
TWV Video Highlights
NDN Editor's Picks
House Ads