ABINGDON, Va., Oct. 13 /PRNewswire-FirstCall/ -- Alpha Natural Resources,
Inc. (NYSE: ANR) has completed the sale of its majority interest in the
Gallatin Materials lime joint venture and a non-strategic block of coal
reserves in eastern Kentucky. Alpha expects that the two transactions will
result in a pre-tax book gain in the company's fiscal third quarter of
approximately $25 million, or approximately $15 million after tax.
Gallatin Materials
A private lime producer has purchased Gallatin Materials LLC and its lime
manufacturing plant in Verona, Ky. The purchase price was not disclosed.
Kevin Crutchfield, Alpha's president, said that several lime producers had
contacted Alpha earlier this year expressing interest in Gallatin Materials,
which Alpha formed with its minority partners in late 2006. 'At the time we
were approached, Alpha was facing a decision to either commit considerable
capital to expand Gallatin to a two-kiln operation or explore other options
for the business,' Crutchfield said. 'One of the parties subsequently tabled a
very reasonable offer, one that provided us with an excellent short-term
return on the project, and we decided to accept it and exit the business.'
Alpha had a 77.5 percent interest in the Gallatin joint venture and
expects to record a pre-tax gain in the third quarter of approximately $14
million on the sale.
Kentucky May Property
Alpha has completed the sale of approximately 17.6 million tons of
underground coal reserves in eastern Kentucky to a private coal producer for
approximately $13 million in cash. Alpha expects to record a pre-tax gain on
the sale of approximately $11 million in the third quarter.
The reserves were included in an estimated 73 million tons of reserves and
other assets acquired from Progress Fuels Corp. in May 2006 for $23 million
plus a $3.7 million adjustment for working capital.
