A joint venture formed Tuesday by Javelin Global Commodities, Uniper Global Commodities and producer Blackjewel has bought Noble Group's US coal business.
Noble Group announced Tuesday it has sold its interests in MR Coal Marketing & Trading, which handles its domestic and international US coal book, to an unnamed company for about $34.5 million. Javelin confirmed to S&P Global Platts that its newly formed JV, Blackjewel Marketing and Sales Holdings, bought that coal business but provided no further comment.
One former Noble Group employee said "the writing has been on the wall for months" that the US coal marketing group would be dissolved by the end of the year as part of the company's downsizing.
Hong Kong-based Noble Group has struggled this year, posting a $1.2 billion loss in the third quarter and a $3.05 billion loss through nine months. Co-CEO Jeffrey Frase resigned in November.
The company has shed essentially all its US-based business this year to cut costs during what it called a "strategic review" as it turned focus to the Asian commodities markets.
The sale of Noble Group's US coal business to Blackjewel Marketing comes after the Noble Group sold its US-based natural gas and power business to Mercuria Energy Trading and its Americas-focused oil business to Vitol. MARKETING CAPP, PRB TONS
The formation of Blackjewel Marketing came a day after producer Contura Energy announced it had sold its Powder River Basin assets -- the Eagle Butte and Belle Ayr mines in Wyoming -- to Blackjewel, one of a group of coal companies controlled by Jeff Hoops.
A statement issued by Blackjewel Marketing on Tuesday said it will market 100% of Blackjewel's 28 thermal and metallurgical mines in Kentucky, Virginia and West Virginia, as well as the Eagle Butte and Belle Ayr mines. The Central Appalachian mines produce 5 million st/year and Blackjewel said production is expected to grow to 11 million st/year by 2020, including 7 million st of metallurgical coal. Combined, the Eagle Butte and Belle Ayr mines produce about 35 million-40 million st/year.
"We expect the joint venture to make an immediate impact by developing new strategies for marketing our thermal and metallurgical coal in both the domestic and export markets," Hoops, Blackjewel's CEO, said in the statement.
Javelin will have exclusive marketing rights for domestic and export metallurgical coal and domestic thermal coal, with Dusseldorf, Germany-based Uniper the marketing rights for export thermal coal. Javelin and Uniper will both provide hedging, logistics, execution and optimization services to Blackjewel through the JV, which will be managed by Javelin.
"Javelin's marketing agreement helps expand our range of metallurgical coals for our customers in the domestic and international steel industry," Javelin CEO Peter Bradley said in the statement. "We are particularly pleased to work with a company like Blackjewel, which has such a strong history of growth and broad suite of high-quality met and steam coals, which fits well with Javelin's desire to become a dynamic force in the global coal markets."
Uniper CEO Keith Martin added that the "transaction represents a key step in our long-term strategic vision and a vehicle to continue to grow our presence in US coal markets."
