A Texas company has purchased the idled Enterprise Mining Corporation LLC assets, which include the EMC #9 mine in Knott County and the Roxana Preparation Plant in Letcher County, and has indicated it plans to restart operations.
Alpha Natural Resources Holdings, Inc. and ANR, Inc., and Enterprise Mining, late last week announced the sale of nearly all of Enterprise’s assets in eastern Kentucky to Kingdom Coal, a subsidiary of Keystone-Kingdom Resources, of Fort Worth, Tex.
Enterprise was shut down in July, but for the first six months of 2016 the #9A mine produced 393,000 tons of thermal coal for power plants. The EMC #9 mine was the only mine that fed the Enterprise Preparation Plant on Hwy 160 at Roxana.
ANR CEO David Stetson said the sale of Enterprise is part of the company’s strategy to divest itself of “non-strategic” properties.
“As we review divestitures of properties, identification of third parties that will retain our team members and resume operations is paramount. In this case, we were pleased that Kingdom Coal has indicated a desire to restart the Enterprise mines and retain many of our team members.”
Other assets of Alpha could be sold later.
The purchase of Enterprise assets fits into Kingdom Coal’s strategy of mining high quality coal and weathering economic storms. According to its web site, Kingdom prefers to mine high quality coal that can be shipped directly to customers without having to be washed. While the terms of the sale were not released, Kingdom says on its web site that it is targeting lowcost mining operations that do not require large amounts of capital investment. The strategy also includes buying mining operations located near its customers or near a distribution hub.
Kingdom describes itself as a “vertically integrated coal and natural gas operation including coal extraction, coal processing, coal wholesaling and distribution and natural gas through Devonian shale.”
Its business model is “built around niche, localized and scalable low cost operations in southeastern Kentucky.”
According to its website, Kingdom “utilized a zero tolerance safety policy within the operations while also attempting to minimize the impact on the environment during our extraction, processing and/or distribution of fuel products.”
Coal demand is projected to increase by 0.1 percent between 2010 and 2035, despite steep declines beginning in 2011. U.S. coal production dropped below 1 billion short tons in 2013 for the first time since 1993.
Cheap natural gas has affected the price and demand for coal in recent years, but exports of coal have continued to expand. Production increased to a little more than 1.2 billion short tons in 2014, reversing the trend, according to the U.S. Energy Information Administration. Increased exports and changing weather patterns should help offset the movement from coal to gas, according to the Kingdom Resources web site.