Essar in deal to acquire US coal miner Trinity for $600 million
08 March 2010
Essar Group, through its subsidiary Essar Minerals, Delaware, entered into a deal on Saturday to acquire the US-based coal miner Trinity Coal from the energy and commodities-focused fund Denham Capital Management for up to $600 million.
The media had reported on Friday that both companies were negotiating to conclude a deal as the acquisition would help Essar to use the coal to run its steel plant in North America. (See: Essar Global in talks to acquire US coal miner Trinity Coal for $600 million)
Milton, West Virginia-based Trinity Coal, founded in 2005 by industry executive Jeff Hoops and Denham's predecessor, hedge fund manager Sowood Capital Management LP, is the 21st biggest coal producer in the US, according to the US Energy Information Administration.
Trinity, operating in the Central Appalachian coal basin, owns a variety of surface and underground mines in southern West Virginia and eastern Kentucky that are estimated to have reserves of 200 million tonnes of both steam and metallurgical coal.
Trinity operates six mining complexes with a total of 10 surface mines, three underground mines and six highwall miner units and sells its coal to electric utilities, steel manufacturers, coal brokers, and other buyers primarily in the eastern US.
Essar plans to ramp up production at Trinity to 10 million tonnes per year from the current 7 million tonnes.