Patriot Coal (OTC Pink: PATCA) announced Dec. 31 that it will permanently close the Highland Mine located near Henderson, Kentucky, and the Dodge Hill Mining Complex located near Sturgis, Kentucky, effective that same day.
The Heritage prep plant and barge loading terminal on the Ohio River will continue processing and shipping coal until inventories are depleted. As part of Patriot’s review of strategic options, the company said it is selling certain assets in the west Kentucky region, along with certain coal supply agreements, to affiliates of Alliance Resource Partners LP (NASDAQ: ARLP), and certain coal reserves also in the west Kentucky region to a related party of Alliance Resource Partners. Alliance is a major producer in the region already, along with competitor Armstrong Coal.
Patriot Coal said is engaged in separate talks to sell the closed Highland mine and Heritage facilities to other, unnamed parties and expects to conclude such transactions in the first half of 2015.
Patriot Coal is a producer and marketer of coal in the eastern United States, with eight active mining complexes in Appalachia and the Illinois Basin. It had ten active complexes before it shut these two in west Kentucky. It had gotten most of its assets, including the now-shut west Kentucky operations, in a spin-off last decade from Peabody Energy (NYSE: BTU).