“The significant coal and surface assets we acquired position Cloud Peak Energy well for future growth in our Asian exports as additional terminal capacity becomes available. The location of the coal and surface lands close to the Spring Creek mine and its rail spur should reduce development costs and allow future operating synergies to be realized. The quality of the coal is similar to that of our Spring Creek mine and offers lower sodium levels to further meet the needs of our customers,” said Colin Marshall, president and CEO of Cloud Peak Energy.
Of the approximately 450 million tons of in-place coal, the undeveloped Youngs Creek mine permits cover 291 million recoverable tons of low sulfur, high Btu subbituminous coal. Of this permitted coal, 267 million tons benefit from a royalty rate of 8% payable to CONSOL and Chevron which is below the normal 12.5% of gross proceeds payable on federal coal.
The 38,800 acres of land includes Youngs Creek surface to the south and extends to the border with Cloud Peak Energy’s Spring Creek mine to the north. The property also extends onto the Crow Indian Reservation to the west and abuts the Decker mine, of which Cloud Peak Energy owns 50%, to the east.