The largest coal company in Utah, which employs about 840 people at three central Utah mines, has been sold for an undisclosed price to a consortium led by Murray Energy Corp.
The Sufco, Skyline and Dugout Canyon mines will become part of a new partnership called Canyon Consolidated Resources (CCR). The partnership was formed largely by Murray Energy and the outgoing chairman of Bowie Resource Partners, a Louisville-based company that had owned the three mines. The trio accounted for 9.5 million tons, or almost 85 percent, of the 11.2 million tons of coal mined in Utah last year.
“We are very familiar with Bowie’s coal mines and with coal markets both domestically and internationally,” said Murray Energy executive Bob Murray, whose company operates the Lila Canyon mine in Carbon County. “This partnership will generate tremendous cost synergies, which will allow these mines to be extremely competitive in the domestic and international coal marketplace.”
A Murray Energy subsidiary also co-owned and managed the Crandall Canyon mine in Emery County until it was closed in 2007, after a pair of implosions killed nine men and injured six others.
Bowie Resources had been owned by Galena Private Equity Resource Fund, a subsidiary of a Netherlands-based, multinational commodity trading company called Trafigura. Galena sold its stake to the partnership, with Murray Energy and former Bowie Resources boss John Siegel each acquiring 30.5 percent interests in CCR.
Another 28 percent ownership share will be held by various lenders, Murray said in a news release, while much smaller portions will be owned by Javelin, which markets and trades thermal coal and other commodities, and CLISA, a trading and investment firm in Mexico that focuses on the energy industry.
Murray said the three newly acquired Utah mines will give CCR about 215 million tons of coal reserves, with expectations of producing and selling about 13 millions tons annually in domestic and foreign markets.
All coal cut at Murray Energy’s Lila Canyon mine will be sold to CCR, Murray noted, adding that his company’s personnel also will help oversee daily operations at Sufco, Skyline and Dugout Canyon.
“We have long maintained that our industry must undergo significant consolidation in order to survive in what have been extraordinarily depressed coal markets,” said Rob Moore, Murray Energy’s chief operating officer. “This CCR partnership will provide this necessary consolidation, which will substantially benefit all interested parties.”
Outside of Salina, Sufco has been the state’s most productive mine for years. Last year, it yielded 5.4 million tons of coal and is not too far off that pace this year, with 387 employees involved in its operations at the end of September.
Skyline, which is on the Carbon/Emery county border, produced 3.5 million tons of coal last year and has 355 employees. About 650,000 tons of coal were cut last year at Carbon County’s Dugout Canyon mine, which had 94 employees this fall, according to federal Mine Safety and Health Administration records.
