NewLead Holdings Ltd. (NASDAQ: NEWL) announced Dec. 18 that it recently completed the acquisition of a coal wash plant in Kentucky.
The wash plant is operational and will immediately generate revenue and positive cash flow for the company. The facility can wash, blend, size, store and deliver coal and has a rail load attached which allows loading of the washed coal on its own rails and trucks as well as delivery directly to its destination. The rail loadout allows for reduced cost of coal transportation.
Since April 2011, the unnamed plant has processed an average of about 59,000 tons of coal per month. Currently, the plant has a contract in place for processing, as requested, up to a maximum of 150,000 tons of coal per month, scheduled to expire in June 2016.
Michael Zolotas, chairman and CEO of NewLead, stated: “The completion of the acquisition of the wash plant is an important step in developing our vertically integrated shipping and commodity model. The acquisition of the coal wash plant greatly enhances NewLead’s commodity arm because it is a vital part of coal production process. It ameliorates the quality of the coal produced and it produces profits from washing coal for third parties. The use of the rail load allows for a competitive advantage in logistics and transportation over the selling pricing mechanism of high quality coal as compared to our piers. We expect the coal wash plant to immediately contribute positively to our earnings.”
NewLead Holdings is an international, vertically integrated shipping and commodity company that manages product tankers and dry bulk vessels.