Arch Coal ( ACI) signed a $364 million agreement to acquire Vulcan Coal Holdings, the owner of Triton Coal Co., the nation's seventh-largest coal producer and the operator of two mines in Wyoming's Powder River Basin.

Triton's mines, North Rochelle and Buckskin, produced a total of 42.2 million tons of coal in 2002 and are supported by a reserve base of about 744 million tons. The acquisition increases Arch's total reserves in the Powder River Basin by roughly 50%, from 1.4 billion tons to 2.1 billion tons. Triton's North Rochelle mine is located next to Arch's existing Black Thunder mine.

Triton had revenue of $289.2 million last year. Arch had revenue of $1.53 billion for the year ended Dec. 31.

Arch expects to make a small reduction in administrative staff, but the company plans to retain the majority of Triton's workforce. Arch will finance the acquisition with cash and borrowings under its existing bank revolver facility.

The boards of Arch Coal and Vulcan Coal have approved the transaction.

Shares of Arch were up 76 cents, or 3.6%, to $21.85 in recent New York Stock Exchange trading.

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