Bowie will operate five mining complexes in Colorado, New Mexico and Utah, employing more than 1,700 people.
“These acquisitions fit the vision and model that were the genesis of Bowie Resource Partners, as we continue to buck the industry trend with long-term contractual partnerships with our customers and secure margins in our niche,” said John Siegel, executive chairman for Bowie Resource Partners. “The El Segundo and Twentymile mining complexes have exemplary safety and productivity records, long-term relationships with domestic customers, and superior reserve quality that combine to render this an accretive and synergistic acquisition for us that will create economies of scale and lower cost.”
The El Segundo and Twentymile mining complexes are located in northwestern New Mexico and northern Colorado, respectively. These two assets currently produce approximately 12 million tpy of high BTU, low sulfur coal with a reserve base that allows for long mine lives with considerable extension and development opportunities.
The sale of the three Peabody mines, which have combined coal reserves of approximately 330 million tons, has been by approved by the Peabody Board of Directors and is expected to be completed in the first quarter of 2016. The transaction will increase Bowie’s reserves to more than 500 million tons and expand its reserve life to more than 20 years.
These mines will build upon Bowie’s strong, long-term contract portfolio in the Western Bituminous region, Siegel explained. Production at these mines is fully committed for the next several years and, like Bowie, also supported by other contracts that run into the next decade. After the transaction, the workforces of El Segundo and Twentymile are all expected to remain in place and become Bowie employees.
Bowie has three underground coal mines in Utah’s Uinta Basin capable of producing 12.6 million tpy. The majority of the company’s current coal sales are to domestic customers, pursuant to long-term, high-volume coal supply agreements with fixed pricing.