Revelation Energy has reached an agreement with Arch Coal to buy the Lone Mountain coal complex and nearby Central Appalachian properties on the Virginia-Kentucky border, sources Tuesday told S&P Global Platts.
Terms and details of the transaction have not been disclosed by either company. Neither Arch nor Revelation responded to requests for comment.
Sources said the deal includes the active Lone Mountain complex and Pardee preparation plant along with the idled Powell Mountain complex.
Multiple sources said Arch had been marketing the properties in an effort to shed some of its higher-cost mines and idled facilities. Revelation likely beat out other potential buyers by offering cash on close of the transaction instead of only taking transfer of liabilities as payment, a longtime CAPP participant said.
Revelation CEO Jeff Hoops, also founder of Lexington Coal Company, last week agreed on a deal with Alpha Natural Resources to acquire 280 mining permits in Kentucky, Illinois, Tennessee and West Virginia. The transaction called for Lexington to be paid $204 million in cash at the time of closing and $112 million in installment payments to assist in reclamation and environmental obligations.
The CAPP participant noted last week's deal with Alpha gave Hoops and Revelation the cash to secure the deal with Arch.
Lone Mountain produces PCI coal primarily for the industrial market with a secondary thermal product used by a handful of domestic utilities. Arch said it sold 1.3 million st of coal from the complex in 2016. US Mine Safety and Health Administration data shows 1.3 million st of production at Lone Mountain last year and 732,279 st of output through the first half of this year.
