Alliance Resource Partners, L.P. (NASDAQ: ARLP) today announced that Alliance Coal, LLC (“Alliance Coal”), its wholly-owned subsidiary, has entered into a definitive agreement with Green River Collieries, LLC (“Green River”) to acquire substantially all of its coal-related assets located in Webster and Hopkins Counties, Kentucky. The transaction includes the Onton No. 9 mining complex and an estimated 40.0 million tons of coal reserves in the West Kentucky No. 9 coal seam.
ARLP currently anticipates consummation of the proposed transaction following the completion by Green River of certain closing requirements.
“Strategically the acquisition of Green River further expands our presence and enhances ARLP’s existing operating platform in the growing Illinois Basin coal market,” said Joseph W. Craft III, President and Chief Executive Officer. “The Onton No. 9 mine is an attractive addition to our current operations in western Kentucky and provides ARLP with increased flexibility to service our existing customer base. We look forward to welcoming Green River’s employees and management to the Alliance team.”
The Onton No. 9 mine is an underground mining complex which uses three continuous mining units employing room-and-pillar mining techniques. The mine currently produces annually an estimated 2.1 million tons of coal and employs approximately 315 workers. Green River is in the process of completing an air shaft which would allow the addition of a fourth continuous mining unit should market conditions warrant increased production from the mine. Essentially all of the planned 2012 production from the mine is committed and priced under Green River contracts with existing ARLP customers.
This announcement is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b), with 100% of the partnership’s distributions to foreign investors attributable to income that is effectively connected with a United States trade or business. Accordingly, ARLP’s distributions to foreign investors are subject to federal income tax withholding at the highest applicable tax rate.