FirstEnergy and Boich Companies, a privately held Columbus, Ohio-based coal company, originally purchased Signal Peak in 2008 as a joint venture, with FirstEnergy acquiring a 45% interest for $125 million. In 2009, FirstEnergy invested an additional $8.5 million, increasing its interest to 50%.
“Signal Peak represents our first investment in a coal mine located in the U.S.,” said Timothy Legge, chairman, Gunvor S.A. “It presents Gunvor with the opportunity to use the existing rail and port operations to market this high quality, low sulfur bituminous coal to expanding markets around the world, particularly in the Pacific and Asia markets through our arrangements with Westshore Terminals in Vancouver.”
As part of the new agreement, FirstEnergy Generation Corp., a subsidiary of FirstEnergy Corp., has revised its original coal purchase agreement with Signal Peak to reduce from 7.5 million tons annually to no more than 2 million each year of the mine’s production. In addition, Gunvor also has a substantial coal purchase agreement with Signal Peak. Overall, the production forecast for Signal Peak, including future surface operations, is expected to rise to approximately 15 million clean tons per year from the current 9 million tons, which can be sold to Gunvor as well as other domestic and international customers. Signal Peak produces a low-sulfur, low-ash bituminous coal.