Coal mine operation venture announced in county
Published 12:00 am Tuesday, November 1, 2005
Walter Industries, based in Tampa, Fla., has announced a $19.6 million investment in a joint venture to operate an underground coal mine in Shelby County.
According to Mike Monahan, director of corporate communications, the coal could be used in mills and foundries or burned to generate power.
While he said the operation will be in Shelby County, he said no specific location has been identified to date.
Last Wednesday, Walter Industries Inc. announced in a press release that United Land Corporation, a subsidiary of the company, executed an agreement to invest up to $19.6 million in Kodiak Mining Company LLC, a joint venture established to operate an underground coal mine in Shelby County.
The mine has about 4.3 million tons of reserves, which can be sold as &8220;high vol, hard coking coal or high BTU low sulfur steam coal.&8221;
&8220;This is an outstanding opportunity to diversify our coal production while leveraging strong demand in metallurgical and steam coal markets,&8221; said Gregory E. Hyland, chairman and chief executive officer of Walter Industries.
&8220;The joint venture provides an immediate source of incremental coal production and strong potential for future mining opportunities.&8221;
According to the press release, United Land owns 51 percent of the joint venture, with the remaining 49 percent owned by R&S Coal LLC.
Jimmie R. Ryan, who contributed the mineral rights and certain mining equipment to Kodiak, controls R&S Coal.
Ryan, who has significant coal mining experience, will serve as president of Kodiak.
Kodiak’s operating results will be consolidated into Walter Industries’ financial statements.
Under the agreement, Kodiak has the rights to mine some 4.3 million tons of underground reserves, with an opportunity to mine additional coal if economically feasible.
Total production is expected to be about 700,000 tons per year until the reserves are exhausted or a new mining area is developed, with United Land entitled to 51 percent of that volume.
A third-party contractor that is owned and operated by Ryan will mine the reserves, and the coal will be marketed through another wholly owned Walter Industries subsidiary, Blue Creek Coal Sales Inc.
Walter Industries said it expects the investment to generate net income of $5 to $6 million per year beginning in 2006.
There are significant additional underground coal deposits contiguous to this mine location and opportunities to access, develop and mine additional coal will be diligently explored while the initial coal reserves are being mined.
Walter Industries Inc. is a leader in water infrastructure and water transmission products and a significant producer of high-quality metallurgical coal for worldwide markets.
Based in Tampa, Fla., the company employs some 10,600 people