NewLead lines up coal sales, buying minerals properties

A shipping company, NewLead Holdings Ltd. (NASDAQ: NEWL), said Feb. 26 that it is investing in minerals properties in Kentucky and Tennessee even as it is lining up shipments of coal.

NewLead said that it has signed an agreement to supply and deliver 1.48 million metric tons (tonnes) of steam coal to a third party buyer. The contract is expected to generate approximately $148m in revenue over the life of the contract. NewLead also announced that it has entered into an agreement to extend previously announced mine acquisition agreements.

The contract provides for the sale of 130,000 tonnes of coal, commencing in March 2013, followed by 150,000 tonnes per month beginning in April 2013 until the end of 2013. All tonnage is subject to a variation of 10%. The price was established based on the prevailing market price for steam coal at the time the contract was entered into. Loading of this steam coal is expected to commence by the end of March 2013. Delivery of the coal will be completed by NewLead’s ocean-going fleet, whether by existing vessels or newly chartered-in from the market.

Michael Zolotas, Chairman, President and CEO of NewLead, stated, “We are integrating our commodity and transport operations. We secured a contract not only to profitably supply steam coal, but to also profitably transport this coal to our buyer, a creditworthy counterparty. Our vertically integrated operation provides various profitable sectors and, we believe, an advantage over other competitors.”

The company said that it entered into an agreement to extend the date until March 5, 2013, by which it must acquire title and mineral excavation rights to 5,000 acres of land in Kentucky and ownership and leasehold interests in 18,335 acres in Tennessee. The extension was required to accommodate the needs of the sources of financing for these mines. However, there is no assurance that the acquisitions will be consummated by March 5, or at all, the company noted.

NewLead is an international, vertically integrated shipping and commodity company that manages product tankers and dry bulk vessels. It said it currently controls four vessels, two tankers and two dry bulk vessels.

A recent SEC filing by the company said about Zolotas: “Michael S. Zolotas has long-standing experience in the shipping sector. As a third generation ship-owner, he has over 18 years of experience in commercial, operational and technical management in the shipping industry. Mr. Zolotas has managed over 75 vessels in less than 15 years. Prior to October 2009, Mr. Zolotas was Chief Executive Officer of Grandunion, a private ship management company with 40 vessels under management. Mr. Zolotas founded Grandunion together with Mr. Nicholas G. Fistes in 2006. As Chief Executive Officer of Grandunion, Mr. Zolotas bought and sold more than 60 vessels, including newbuildings. Today, he still serves as Chief Executive Officer of Grandunion.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.