Murray Energy increases stake in Utah coal mining

    Murray Energy Corporation has announced a new partnership that will create the biggest bituminous coal production company in the Western United States, which will include three underground mines in Utah    
    According to a news release, the partnership, Canyon Consolidated Resources, will combine the assets, the marketing, logistics and business development platform of Bowie Resource Partners with the management and operational expertise of Murray’s UtahAmerican Energy and the marketing expertise of Grupo CLISA, a trading and investment group based in Mexico.
    CCR will operate the Sufco Mine, Skyline Mine and Dugout Canyon Mine. Murray Energy will also sell all of the coal produced at its Lila Canyon Mine to CCR, which will oversee the day-to-day operations at the mine.
    The new partnership will own nearly 215 million tons of coal reserves and will produce and market approximately 13 million tons of coal per year in both domestic and export markets.
    The Murray Energy Corporation news release said CCR investors expect to finance a portion of the partnership and pay related fees and expenses with the proceeds of debt financing. A portion of the proceeds will be used to recapitalize Bowie’s existing capital structure.
    Debt financing occurs when a firm raises money for working capital or capital expenditures by selling bonds, bills or notes to individuals and/or institutional investors. One advantage to debt financing is the interest on debt is tax deductible.
    Murray Energy and entities owned or controlled by John Siegel, current Chairman of Bowie Resource Partners, will each own 30.5 percent of CCR. 28.5 percent will be owned by second lien lenders; 7.25 percent by Javelin, a marketing and trading firm of coal and other commodities, and 2.25 percent by Grupo CLISA.
    Executive Vice President of Murray Energy Robert Moore stated, “Clearly, the United States coal industry has experienced tremendous transformation over the past several years. We have long maintained that our industry must undergo significant consolidation in order to survive in what have been extraordinarily depressed coal markets. This CCR partnership will provide this necessary consolidation, which will substantially benefit all interested parties.”