The sale includes the Hazard thermal coal mining complex and related infrastructure as well as approximately 38 million tons of thermal coal reserves in eastern Kentucky.

The Hazard complex includes four active surface mines: East-Mac & Nellie, Rowdy Gap, Bearville and Thunder Ridge, as well as the Teton preparation plant and Kentucky River Loading facility.

Arch also divested $15.6 million of reclamation liabilities to Blackhawk as part of the sale, and expects to be released from $43.8 million of reclamation surety bonding.

The producer has the potential to receive future royalty payments of up to $35 million (aggregate) over the next five years resulting from its retention of select coal reserves at Hazard.

“The sale of our Hazard subsidiary demonstrates that we are continuing to streamline our mining portfolio and monetize assets that are not essential to our future growth plans,” President and CEO John W. Eaves said.

“This transaction allows us to further sharpen our focus on strategic assets that have the highest return potential, such as our growing Appalachian metallurgical coal franchise and our low-cost Western thermal coal platform. At the same time, the proceeds from the sale further strengthen our already substantial cash and liquidity position.”

In 2013, Hazard sold 1.7 million tons of thermal coal and generated $4.8 million in earnings before interest, taxes, depreciation and amortization.

Eaves also thanked the employees of the Hazard complex for “substantial efforts” to reduce costs during the difficult market environment and also for achieving an “extraordinary safety performance.”

“In particular, the employees of Hazard’s surface operations and its Kentucky River Loading facility accomplished a perfect safety rate in 2013. Blackhawk is fortunate to gain such an experienced and dedicated workforce,” he said.

An Arch spokeswoman had no additional comment on the sale.

Arch and its subsidiaries retain 12 major mining complexes and more than 5 billion tons of high-quality thermal and coking coal reserves across the U.S.

Blackhawk Mining, which was formed in 2010, was advised in the transaction by Deutsche Bank.