“The acquisition of the Reed family’s mining business in Alabama provides North American Coal with an opportunity to expand our established surface mining business into bituminous coal markets,” said Bob Benson, president and CEO, North American Coal. “North American Coal has been looking for opportunities to grow. The Reed Minerals’ coal reserves, established reputation and location offer us that opportunity. The eight-year steam coal sales contract provides a stable revenue, profit and cash flow base while we further develop a metallurgical coal business platform. We believe this combination will offer the company, its customers and its employees a number of substantial benefits, which we expect will lead to significant opportunities for future growth and profitability.”
The assets include three mines on leased reserves in Central Alabama. Last year, Reed Minerals sold 900,000 tons of coal and had revenue of approximately $86 million and net income of approximately $4 million.