By Casey Junkins
November 2, 2017 - Miners across the nation produced about 26 million tons more coal from April through June compared to the same period in 2016, according to the U.S. Energy Information Administration.
Hoping to capitalize on that growth, Murray Energy officials are forming a partnership to acquire a 30.5-percent stake in three more coal mines via an entity to be known as Canyon Consolidated Resources. These mines are located in Utah, a state in which the St. Clairsville-based company already operates the Lila Canyon Mine.
Murray plans to partner with John Siegel, who serves as chairman of Louisville, Ky.-based Bowie Resource Partners and London-based Javelin Global Commodities to form the partnership. Officials believe Canyon Consolidated resources will be the largest bituminous coal producer in the western U.S., producing and marketing approximately 13 million tons of coal per year in both domestic and export markets.
“We are very familiar with Bowie’s coal mines and with coal markets both domestically and internationally. We believe that this partnership will generate tremendous cost synergies, which will allow these mines to be extremely competitive in the domestic and international coal marketplace,” Murray Energy Chairman, President and CEO Robert Murray said in a release.
Murray operates six mines in Ohio and West Virginia: the Century Mine near Beallsville, the Ohio County Mine near Benwood, the Marshall County Mine near Cameron, the Monongalia County Mine near Blacksville, W.Va., the Harrison County Mine near Clarksburg, W.Va., and the Marion County Mine near Mannington, W.Va.
Murray also owns mines in Illinois, Kentucky and Utah.
Siegel said he is impressed with the efforts of Murray Executive Vice President Rob Moore and other company officials to operate mines in three distinct regions — Northern Appalachia, the Illinois Basin and the Uintah Basin in Utah.
“Murray Energy, under the leadership of (Robert) Murray and Rob Moore, has been successful in consolidating three major mining complexes in the U.S. and creating synergies,” Siegel said. “We are looking forward to working with them to ensure that these mines become even more competitive in the domestic and international marketplace.”
The plan is for CCR to own approximately 214.8 million tons of coal reserves and operate three underground coal mines in Utah: the Sufco, Skyline and Dugout Canyon mines. Additionally, Murray will sell all the coal produced at its Lila Canyon Mine to CCR. This mine now has about 42.3 million tons of reserves.
“Clearly, the U.S. coal industry has experienced tremendous transformation over the past several years. We have long maintained that our industry must undergo significant consolidation in order to survive in what have been extraordinarily depressed coal markets,” Moore said. “This CCR partnership will provide this necessary consolidation, which will substantially benefit all interested parties.”
According to the EIA, Murray was the fifth-largest coal producer in the nation in 2015, trailing Peabody Energy, Arch Coal, Cloud Peak Energy and Alpha Natural Resources. Of these five companies, only Murray and Cloud Peak have not filed for bankruptcy during the last few years.