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Blackjewel forms joint venture with coal marketers after buying Contura mines

Blackjewel LLC announced the formation of a joint venture with two other entities to market the producer's thermal and metallurgical coal.

Blackjewel, which recently acquired both of Contura Energy Inc.'s Powder River Basin mines, formed a joint venture called Blackjewel Marketing and Sales Holdings LLC with Javelin Global Commodities and Uniper SE, according to a Dec. 12 press release.

The new entity will market 100% of the thermal and metallurgical coal produced at Blackjewel's mines.

Javelin will have an exclusive marketing arrangement to sell Blackjewel's metallurgical coal to domestic and export markets, while Uniper will sell the export thermal coal. "Javelin and Uniper will provide hedging, logistics, execution and optimization services to Blackjewel through the joint venture which will be managed by Javelin," the press release said.

Blackjewel owns 28 mines, five wash plants and seven loadout facilities in Central Appalachia on CSX Corp. and Norfolk Southern Corp. railroads. The company produces about 5 million tons of coal annually and expects to grow to 11 million tons per year by 2020, about 7 million tons of which will be metallurgical coal.

The press release said the two PRB mines that Blackjewel recently acquired have a combined yearly production total of 35 million to 40 million tons.

"Blackjewel is extremely excited to have the opportunity to partner with Javelin and Uniper. We expect the joint venture to make an immediate impact by developing new strategies for marketing our thermal and metallurgical coal in both the domestic and export markets," Blackjewel Chairman, President and CEO Jeff Hoops said in the release.

Javelin CEO Peter Bradley said it was honored by the partnership with Blackjewel and Uniper.

"Javelin's marketing agreement helps expand our range of metallurgical coals for our customers in the domestic and international steel industry. We are particularly pleased to work with a company like Blackjewel, which has such a strong history of growth and broad suite of high quality met and steam coals, which fits well with Javelin's desire to become a dynamic force in the global coal markets," he said.

Uniper Global Commodities SE CEO Keith Martin said in the release that the company was delighted with the joint venture.

"It's the ideal marriage of assets and know-how, coupling our coal and freight hedging and optimization expertise with a leading producer and a hugely experienced team of coal marketers. This transaction represents a key step in our long-term strategic vision and a vehicle to continue to grow our presence in U.S. coal markets," Martin said.

Javelin was also recently involved in a failed deal to acquire Bowie Resource Partners LLC's assets involving Murray Energy Corp.