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SunCoke Energy Buys Affiliated Virginia Coal Companies
01/18/2011 - SunCoke Energy has purchased Harold Keene Coal Co., Inc., as well as affiliated entities and their related assets for approximately $40 million in cash, including working capital. Coal reserve estimates for the assets of the entities being purchased total at least 16 million tons, with final estimates to be confirmed by a reserve study that is currently underway.
SunCoke Energy has purchased the Honaker, Va.-based Harold Keene Coal Co., Inc., its affiliated entities, and their related assets for approximately $40 million in cash, including working capital.
Coal reserve estimates for the assets of the entities being purchased total at least 16 million tons, with final estimates to be confirmed by a reserve study that is currently underway.
“This acquisition significantly increases SunCoke Energy’s coal reserves, representing an important step forward in building the value proposition we offer customers,” said Frederick A. “Fritz” Henderson, who will serve as Chairman and CEO of SunCoke Energy upon its separation from Sunoco. “Given its contiguous nature, we believe we can manage this acquisition effectively as part of our existing Jewell coal and coke operations in Vansant, Va., allowing us to create immediate value for the business.”
As part of this transaction, SunCoke will acquire two active underground mines and one active surface and high-wall mine currently producing 250,000 to 300,000 tons of coal annually, with the potential to expand production in the future. Current production volumes are contracted for sale through 2011.
SunCoke Energy, which is currently part of Sunoco, uses its proven, proprietary processes to produce high-quality metallurgical-grade coke for major steel manufacturers in the United States and Brazil. SunCoke has been a market leader in coke production plants that have significantly lower environmental impact, plants that are configured to efficiently produce electricity and/or high-grade industrial steam from heat recovered from the coking process. The company's facilities in the U.S. - located in Virginia, Indiana, Ohio and Illinois - have the capacity to manufacture approximately 3.67 million tons of metallurgical coke annually.
SunCoke Energy is also building a plant in Middletown, Ohio, that is slated to produce 550,000 tons of coke and 46 megawatts of electricity when fully operational in the second half of 2011. SunCoke is the operator of, and has an equity interest in, a 1.7 million tons-per-year coke making facility in Vitória, Brazil. The company has been mining the type of coals used in manufacturing coke for more than four decades. SunCoke previously announced plans to increase production from its metallurgical coal mines by approximately 45% to approximately 1.75 million tons annually.
Sunoco is a leading transportation fuel provider, with operations located primarily in the East Coast and Midwest regions of the United States.
