Rhino Resource Partners has completed the sale of its Central Appalachia Deane mining complex in eastern Kentucky, US, to Quest Energy.

The complex houses one underground mine and related infrastructure comprising a preparation plant and a unit train loadout facility.

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Following the sale, Rhino will retain the mineral rights for the 39.3 million tonnes of proven and probable steam coal reserves at the Deane complex.

"The sale of the Deane mining complex is a significant step in our strategy."

The transaction also includes a royalty agreement signed with Quest Energy under which the company will collect future royalties for coal that is mined and sold from the complex.

Rhino Resource Partners general partner president and CEO Joe Funk said: "The sale of the Deane mining complex is a significant step in our strategy to convert idle, non-core mining operations with high carrying costs to cash generating royalty assets.

"The Deane mining complex sale demonstrates our strategy to retain the mineral ownership or mineral rights to properties that transforms these assets to generate future royalty income streams.

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Rhino is expecting to reduce its operational risk, reclamation liabilities and bonding requirements.

Quest Energy CEO Mark Jensen said: "Completing the acquisition of the Deane mining complex and leasing the surrounding coal from Rhino’s Elk Horn subsidiary compliments our current operational and reserve footprint in the region and allows us to expand our production and processing capabilities."

For the year ended 31 December 2014, the mines at Rhino’s Tug River, Rob Fork and Deane mining complexes produced an aggregate of about 0.8 million tonnes of steam coal and an estimated 0.3 million tonnes of metallurgical coal.