Plans to integrate the company's interests in its Canadian metallurgical coal assets and port facilities into the Fording Canadian Coal Trust have been on the cards since January.
The assets include Consol’s 50% joint venture interest in the Line Creek Mine near Sparwood, British Columbia; 50% joint venture interest in the Cheviot Mine project and related metallurgical reserves and resources; 50% joint venture interest in the Cardinal River Mine near Hinton, Alberta; and 23.175% equity interest in the Neptune Bulk Terminals and its terminal contract with Neptune.
Consol’s sale of the 3.2 million units it received in the deal is expected to deliver C$105 million to C$110 million on a pretax basis into the US mining company's coffers.
"While the Fording Canadian Coal Trust is an exciting development," said J. Brett Harvey, president and chief executive officer, "we have concluded that participation as a passive investor with a minority interest in the Trust is not as valuable to our shareholders as monetizing these assets and redeploying the funds."
Harvey said the redeployment of funds could include investment in additional gas well drilling on the company's proved reserves in Virginia and reduction in debt levels.
He said Consol will continue to serve the metallurgical coal markets with production from its United States and Australian coal mines.
"We have a 90-year history of participation in this market and we will continue to do so."
