Photo by: Bloomberg
TORONTO (miningweekly.com) – Struggling coal producer Walter Energy on Friday announced that it had agreed to sell its Blue Creek Terminal, at the Port of Mobile, to the Alabama State Port Authority.
The Port Authority would pay $25-million to NYSE-listed Walter for the terminal and a nearby 24 ha land parcel.
Walter said that it had also agreed with the Alabama State Port Authority to amend the terms of the coal handling agreement under which the Port Authority currently handles the company's coal exports through the McDuffie coal terminal in Mobile, Alabama.
As part of the amendment, the Port Authority had agreed to a long-term extension of the existing coal handling agreement and to make certain improvements to the McDuffie terminal to ensure the company had the capability to export the coal that would be produced when its Blue Creek mine was completed.
Alabama State Port Authority director and CEO James Lyons said that the deal was critical to the authority's growth in the areas of container and intermodal freight.
“Strategically, these acquisitions will help us expand our container business,” Lyons said.
Walter Energy had been struggling with multiple setbacks in recent years, including stubbornly low coal prices. It recently announced that it would idle two mines in British Columbia, resulting in about 700 temporary layoffs.