The world’s leading pure-play coal company, serving power and steel customers in more than 25 countries, has added a major coal mine to its portfolio as it continues to expand.
Peabody Energy announced in a statement this week that it has signed a definitive agreement to purchase the Shoal Creek metallurgical coal mine from Drummond Company, a private coal producer.
The deal, valued at $400 million will see Peabody purchase the Central Alabama mine, as well as a preparation plant and supporting assets.
Shoal Creek will add around two million tones per year of high quality hard coking coal sales, which is in line with a company wide upgrade to its entire metallurgical coal platform.
In 2017, the mine sold 2.1 million tons and total mining costs per ton approximate the average cost of Peabody's metallurgical coal platform.
"Peabody has consistently outlined our intention to upgrade our metallurgical coal platform and make strategic investments using a strict set of filters. We believe the purchase of the well-capitalized and high-quality Shoal Creek Mine meets these filters, offers major logistical advantages and represents an opportunity to create significant value," said Peabody President and Chief Executive Officer Glenn Kellow. "The acquisition allows us to expand volumes and margins from our met coal platform, enhances our scale, and offers complementary products to customers. We applaud the Drummond team for developing a high-quality operation, and we look forward to advancing that reputation for excellence."