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July 15, 2014

PBS Coals to be sold for $140 million

FRIEDENS — A Canadian coal company has purchased PBS Coals Inc. of Friedens for $140 million.

Corsa Coal Corp. of Toronto, Ontario, an­nounced Tuesday that it bought PBS from OAO Severstal, a Russian company that has owned the Somerset County coal company since 2008.

Corsa will pay $60 million in cash, assume $60 million of reclamation and water treatment liabilities, and place $20 million into an escrow account to cover any future liabilities.

“This acquisition is a perfect match for Corsa’s strategic vision of building a low cost, premium quality metallurgical coal producer,” Corbin Robertson III, Corsa’s chairman and co-founder of Quintana Capital Group, the largest shareholder of Corsa, said in a news release.

Keith Dyke, Corsa president, said the proximity of PBS’ assets and infrastructure to Corsa’s existing Pennsylvania operations creates considerable synergy and marketing opportunities.

“Adding the PBS metallurgical coal properties improves Corsa’s ability to grow production, lower costs and better serve customers domestically and internationally,” he said.

PBS had been one of Somerset County’s largest employers in recent years until a downturn in the market forced cuts.

PBS has 13 mines and two coal-preparation plants with acess to CSX and Norfolk Southern Railway lines. Together the mines sold about

2.5 million and 1.7 million tons of premium quality, low volatile metallurgical coal in 2012 and 2013, respectively.

The sale is expected to be completed by mid-August.

 

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