Contura Energy Inc. has officially closed on the transaction with Iron Senergy Holding LLC (Iron Senergy) for the divestment of the Cumberland mine and related assets in Greene County, Pennsylvania.
The subsidiaries that hold the Cumberland and Emerald mines and the associated coal reserves, mining permits and operations, infrastructure, equipment and transloading facilities have transferred to Iron Senergy. According to the terms of the transaction, Iron Senergy has acquired all of the equity of the following subsidiaries previously owned by Contura: Emerald Contura LLC; Cumberland Contura LLC; Contura Coal Resources LLC; Contura Pennsylvania Land LLC; and Contura Pennsylvania Terminal LLC (together, the Pennsylvania Entities). Iron Senergy has also posted replacement reclamation bonds for the Pennsylvania Entities and assumed their United Mine Workers Association collective bargaining agreements.
Additionally, the closing of this transaction released Contura from all reclamation obligations associated with the Pennsylvania entities, which are estimated to be approximately $169 million. These obligations have been assumed by Iron Senergy.
Iron Senergy plans to continue operating the Cumberland mine beyond 2022, thereby extending employment opportunities for the Cumberland workforce, providing a continued tax base for the local community and sustaining business opportunities for Cumberland’s vendors and a reliable fuel supply for customers.
“Our team is excited about taking over mining operations at Cumberland and extending the operation’s expected lifespan,” said Mike Castle, Iron Senergy’s CFO. “We plan to keep the mine running and continue providing employment opportunities for the talented workforce at the mine.”
Cumberland’s mine management and sales agent will remain with the Cumberland operations under Iron Senergy’s new structure.
Upon the transaction’s closing, Contura provided $20 million in cash consideration to Iron Senergy and transferred $30 million in existing cash collateral to Iron Senergy’s surety provider as collateral for Iron Senergy’s replacement reclamation bonds. Contura retained a large block of Freeport seam metallurgical-grade coal reserves, located near the Cumberland and Emerald properties for potential future
development.
