This week, Arch Resources took more steps toward its transition toward metallurgical coal markets by contributing its Viper thermal mine in Illinois to Knight Hawk Coal, which will operate the mine going forward. As part of the transaction, Arch’s equity stake in Knight Hawk increased to 49.5% from 48%, and Knight Hawk assumed long-term undiscounted mine closure liabilities totaling $21 million. Arch entered the partnership with Knight Hawk back in 2006 as a one-third partner.

“We view the Viper transaction as a highly positive outcome in our ongoing efforts to identify and execute on strategic alternatives for our thermal assets,” Arch Resources President and CEO Paul Lang said. “Knight Hawk shares Arch’s deep commitment to safety, environmental stewardship and social responsibility, and recognizes and values the essential contributions of the Viper workforce in the mine’s ongoing success.”

Arch is also moving forward with the accelerated closure and final reclamation of the Coal Creek mine, with a concerted focus on reducing what it called “highly inflated, state-calculated surety bond requirements.” The company plans to ship on its existing contracts at Coal Creek during 2021 before beginning final closure of the mine’s active pit in 2022.

Arch said it expects to reduce the total asset retirement obligation (ARO) at Coal Creek by an estimated $40 million, or 80% of the ARO at the mine, over the course of the next 18 months. Simultaneously, Arch is also laying the groundwork for reducing the operational footprint at its Black Thunder mine.