Russia Steelmaker Purchases West Virginia Mining Company

Russia’s mining and steelmaking conglomerates, Mechel OAO, is paying $436 million in cash to acquire the coking coal assets of Bluestone Industries, in West Virginia, according to Metal Producing. The purchase covers four mining complexes, with eight active open-pit and five underground mines, comprising an estimated 725 million metric tons of reserves and resources.

Jim Justice, chairman, president and CEO of Bluestone Coal Group, said the sale is “an excellent opportunity to take Bluestone to the next level. In Mechel, we have found a partner with a similar culture, mining operators managing their assets to produce the best product for their customers while continuing to invest in the company’s future.”

The purchase is structured as a cash payment of $436 million (including $36 million interest paid), approximately 83.3 million preferred shares, and assumption of approximately $132 million of debt. In 2008, Bluestone shipped 2.8 million metric tons of coking coal, on sales of approximately $327 million.

Bluestone Coal Corp.’s other businesses, including steam coal assets in Kentucky and other non-coal operations, are not included in the sale. The Mechel organization includes mines and operations producing coal, iron ore, nickel, steel, and hardware, in Russia, Lithuania, and Romania.