The transaction made on Friday gives White 100% of Mountainside’s stock, with White required to pay an additional $700,000 to replace current reclamation bonds over Kentucky permits.
Mountainside operates several mines to produce about 400,000 tonnes of coal per annum for sale to industrial customers in the USA and Canada.
“The Mountainside Coal acquisition will give White Energy the opportunity to introduce our binderless coal briquetting technology into the North American coal industry, and at the same time add value to Mountainside Coal by selling the majority of the production to the specialty markets,” White managing director Brian Flannery said.
“In addition to the Mountainside Coal acquisition, we will continue to work with certain Powder River Basin producers in Western USA in progressing the business case for upgrading their subâ€bituminous coals again using our BCB process”
White will aim to expand Mountainside “in a stepped process” that includes installing a new coal preparation plant and a BCB plant.
The depressed US coal market was noted by White.
“The general power station market in the US consumes significant quantities of coal but selling prices have been much lower in recent times due to competition with surplus gas produced from the large shale gas exploration programs,” White said.
“Test work conducted at White Energy’s Cessnock Demonstration Plant has shown that the fine coal remaining after screening out the sized coal from Mountainside Coal’s production, can be processed into a stable briquette similar to the sized coal.”
White shares are unchanged at 18.5c.
