Arch merges to form larger coal company

GILLETTE (WNE) — Arch Resources, owners of Black Thunder and Coal Creek coal mines in the Powder River Basin, has merged with CONSOL Energy to form a new company, Core Natural Resources.

The merger of thermal and metallurgical coal operations — used for generating power and making steel, respectively — gives the new company a combined 11 coal mines in six states and a market cap of $5.2 billion, according to a news release.

The two companies combined to sell 101 million tons of coal in 2023 used for steelmaking, industrial and power-generation, according to the news release.

For Arch, the deal brings a stronger foothold in thermal coal sales overseas through CONSOL’s connections in that realm, and the latter stands to benefit from Arch’s place in the global market for metallurgical coal, which the company has strongly pivoted toward in recent years.

The deal figures to save the new combined company $110 million to $140 million each year in cost efficiencies, such as logistical improvements, within six to 18 months of the merger finalizing.

Stockholders will receive 1.326 shares of CONSOL stock for each of shares of Arch, and will collectively hold 45% of the new company, with CONSOL shareholders owning the other 55%, according to the news release.

The deal is expected to close by the end of March, with approval from shareholders and regulators.

The company’s headquarters will be in Canonsburg, Pennsylvania, due to its proximity to the majority of the company’s mines, while maintaining a presence in St. Louis, Missouri, where Arch is currently based.

This story was published on August 24, 2024.