Commodity trader Gunvor Group has acquired a 33 percent stake in Signal Peak, a coal mine jointly controlled by FirstEnergy Corp. and Boich, located in the United States for $400 million, FirstEnergy said on Wednesday.
"Signal Peak represents our first investment in a coal mine located in the U.S.," Legge said. "It presents Gunvor with the opportunity to use the existing rail and port operations to market this high quality, low sulfur bituminous coal to expanding markets around the world, particularly in the Pacific and Asia markets through our arrangements with Westshore Terminals in Vancouver, the prime coal moving terminal on the West Coast," Gunvor Chairman Timothy Legge said in statement.
Control over Signal Peak's assets, estimated at $1.5 billion, including debt, will be transferred to FirstEnergy and Boich's joint venture Global Mining Holding Company (Global Holding), a new holding company that will include various Signal Peak entities, FirstEnergy said.
According to Boich CEO Wayne Boich, the agreement would let the company continue maximizing both the mine and rail investment it has made in the state of Montana over the last three years.
"One of the key advantages that Gunvor Group brings to this venture is the ability to utilize their commodity trading relationships in such markets as Japan, China, Korea and Chile to sell more coal," Boich said.
Signal Peak's forecast output will rise to about 15 million tons of coal from the current 9 million tons. FirstEnergy and Boich purchased the mine, which was formerly called Bull Mountain, in 2008 for $450 million.