Partnership buys three coal mines, controls bulk of Utah production

Ohio-based Murray Energy Corp., owner of the Lila Canyon Coal Mine in Carbon County, is leading a new partnership to purchase three Utah mines that account for the bulk of coal production in the state. 

The Sufco, Skyline and Dugout Canyon mines, which employ approximately 850 in Utah’s Carbon/Emery coal belt, will become part of the new partnership called Canyon Consolidated Resources (CCR), formed by Murray Energy and John Siegel, the outgoing chairman of Bowie Resource Partners, a Louisville-based company that had owned the three mines. The three properties accounted for 9.5 million tons, or almost 85 percent, of the 11.2 million tons of coal mined in Utah in 2016.

Murray and Siegel will each own 30.5 percent of the new partnership while United Kingdom-based Javelin Global Commodities Ltd., Grupo Clisa of Mexico and various lenders will have minority positions. Terms of the purchase were not disclosed.

CCR will be the largest bituminous coal producer in the Western United States, producing and marketing approximately 13 million tons of coal per year in both domestic and export markets, according to a release from Murray. CCR will own approximately 214.8 million tons of coal reserves. Murray Energy will sell 100 percent of the coal produced at the Lila Canyon Mine to CCR, and will work with CCR employees to oversee the day-to-day mining operations in Utah.

“We are extremely pleased to form this strategic partnership that is CCR with Mr. John Siegel and our other partners,” said Robert E. Murray, chairman, president and CEO of Murray Energy. “We are very familiar with Bowie’s coal mines and with coal markets both domestically and internationally. We believe that this partnership will generate tremendous cost synergies, which will allow these mines to be extremely competitive in the domestic and international coal marketplace.”

Murray is familiar to Utahns because of his involvement with the media following a collapse at his company’s Crandall Canyon Mine in August 2007, which claimed the lives of six miners and three rescue workers. 

Robert D. Moore, executive vice president and chief operating officer of Murray Energy said, “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.” 

Murray operates mines in Ohio, West Virginia, Illinois and Kentucky in addition to its Utah holdings. According to the Energy Information Administration, Murray was the fifth-largest coal producer in the nation in 2015, trailing Peabody Energy, Arch Coal, Cloud Peak Energy and Alpha Natural Resources.