Cloud Peak Energy Inc., announced in a media release Monday that they've acquired the Youngs Creek Mining Company and other related coal and surface assets from Chevron USA and Consol Energy for $300 million. The release states that of the purchase price, $195 million is allocated to the lease of approximately 450 million tons of in-place coal and $105 million to the purchase and lease of 38,800 acres of land.
Youngs Creek is a permitted but undeveloped surface mine project in the Northern Powder River Basin located 13 miles north of Sheridan, contiguous with the Wyoming-Montana state line. It is 7 miles south of Cloud Peak Energy’s Spring Creek mine and 7 miles from the mainline railroad. The 38,800 acres of land includes Youngs Creek surface to the south and extends to the border with Cloud Peak Energy’s Spring Creek mine to the north. The property also extends onto the Crow Indian Reservation to the west and abuts the Decker mine, of which Cloud Peak Energy owns 50%, to the east.
The media release further states that future development, timing, and production levels are expected to depend largely on the availability of additional export terminal capacity on the West Coast and continued strong Asian demand for thermal coal. The mine would be served exclusively by the BNSF railroad. As Cloud Peak Energy has not completed detailed mine development planning, the acquired coal is not expected to be reported as reserves at year-end 2012.