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Mon March 9, 2009
Arch Coal buys Rio Tinto mine
By Bob Beck
Laramie, WY – Arch Coal Inc. has agreed to purchase Rio Tinto's Jacobs ranch mine for 761 million dollars. The mine is located in the Powder River Basin.
Arch Coal officials say that the Jacobs Ranch mine site borders their existing Black Thunder mine site and should help them provide more efficient and flexible service to their power generation customers. They also are pleased with the purchase because they expect the importance of Powder River Basin Coal to grow over time. Arch estimates that the addition of Jacobs Ranch will result in incremental adjusted earnings between 145 million and 165 million dollars this year. Rio Tinto said in a release that it sold the mine because they are divesting and because the Jacobs Ranch had a lower level of reserves left. It's unclear how the sale will impact the workforce at the site, but a company spokesman said if job cuts occur, they will be minimal.