Rio Tinto sells U.S. coal property to Arch Coal

Arch Coal expands Powder River Basin capacity for low-sulfur coal supply

By Tom Stundza -- Purchasing, 3/9/2009 12:45:00 PM

Rio Tinto, the London mining giant, is selling its Jacobs Ranch coal mine south of Gillette, Wyo., for $761 million to Arch Coal of St. Louis, the companies said in statements today. The mine is located in the southern Powder River Basin, which produces steam coal for power-generating customers in the U.S., reported earnings of $73 million for 2008 from 42.1 million tons of coal.

The Jacobs Ranch mine has 381 million tons of low-cost coal reserves that are contiguous to Arch Coal's Black Thunder mine. The plan is to merge operations of the two mines, according to the RTT news service, since the purchase also includes an expansive fleet of highly efficient mining equipment, including a 120-cubic-yard dragline, eight large electric shovels, and more than 40 large haul trucks, all of which complement the existing equipment at Black Thunder.

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