Rhino Resource Partners LP agreed to sell some of its assets relating to the Pennyrile mining complex to a subsidiary of Alliance Resource Partners LP in a Sept. 6 announcement.
Rhino will sell the assets to Alliance Coal LLC for "cash and other consideration" in a deal that is expected to close in the fourth quarter, according to a company release. Alliance agreed to purchase the majority of equipment at the Illinois Basin operation as well as the preparation plant, barge loadout facilities and related property.
Rhino stopped production at the Kentucky-based Riveredge mine at Pennyrile, which produced nearly 1.3 million tons of coal last year, and will process the raw coal inventory as well as send all remaining shipments to customers this month.
Alliance will assume the majority of all remaining future contracted coal sales related to the Pennyrile complex and will fulfill them from its other operations. The deal does not include a plan for future coal production from Pennyrile.
Rhino notified its employees and gave them the chance to apply for work at its other operations. Their last day of employment is scheduled for Nov. 1.
Rick Boone, president and CEO of Rhino's general partner, said in the release that it was a tough decision to close and sell Pennyrile, but cited pressures the U.S. coal market, and especially the Illinois Basin, faces.
Experts have said that recent mine closure signal the start of needed consolidation in the Illinois Basin. In August, Peabody Energy Corp. and Alliance Resource Partners announced mine closures in the region due to weak market conditions.
