Peabody Energy and Arch Coal have entered into an agreement to combine the companies’ Powder River Basin and Colorado assets.
A major aspect of the joint venture will be merging Peabody’s North Antelope Rochelle Mine (NARM) and Arch’s Black Thunder Mine, the region’s two largest coal producing mines. The mines share more than 7 miles of common property line.
The joint venture is expected to unlock synergies with a pre-tax net value of approximately $820 million, according to the companies.
The joint venture will be 66.5% owned by Peabody and 33.5% owned by Arch.
“This joint venture is an extraordinary example of industrial logic targeted to strengthen the competitive position of our products and create significant value for multiple stakeholders in a low-cost combination,” Peabody President and CEO Glenn Kellow said.
“We are excited about this transaction’s potential to enhance the value of Arch’s top-tier thermal coal assets,” Arch CEO John W. Eaves said.