Peabody Energy has signed an agreement to sell its New Mexico and Colorado coal assets in the US to Bowie Resource Partners (BRP) in a $358m deal.
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Bowie Resource Partners will also assume around $105m in related liabilities.
Under the agreement, Bowie will acquire the El Segundo and Lee Ranch mines in New Mexico, and the Twentymile Mine in Colorado.
According to Peabody Energy, the mines have combined coal reserves of around 330 million tonnes.
Peabody Energy president and CEO Glenn Kellow said: "While our New Mexico and Colorado operations and workforce have been substantial contributors to our success over the years, we are reshaping our portfolio focus around our core regions, including the Powder River Basin, Illinois Basin, and Australia.
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By GlobalData"At this time, we believe it is appropriate to monetise the value of these mines in a transaction that would bring forward multiple years of cash-flows."
Expected to produce 11 million tonnes of coal in 2016, the New Mexico and Colorado mines will generate pre-tax cash revenue after capital expenditures of about $70m during this year.
Following the acquisition, BRP will be able to increase its production to 25 million tonnnes a year and would operate five mining complexes in Colorado, New Mexico, and Utah.
Bowie plans to fund the acquisition through a debt and an equity commitment of $112m from a private equity firm.
Peabody said that the sale will minimise the amount of its self-bonding in place to reclaim obligations more than $300m.
The El Segundo and Twentymile mining complexes currently produce approximately 12 million tonnes of high BTU, low sulphur coal.
The deal is subject to certain regulatory approvals, as well as other customary conditions ,and is expected to close before the end of the first quarter of 2016.
Image: Twentymile Mine in Colorado offers coal with a high-heating value and low-sulfur and ash content. Photo: courtesy of Peabody Energy, Inc.
