By St. Louis Business Journal

Arch Coal Inc. said Wednesday it acquired a 38 percent interest in Millennium Bulk Terminals-Longview, LLC, the owner of a bulk commodity terminal near Longview, Wash., for $25 million, plus additional consideration upon the completion of certain project milestones.

"This transaction gives us a direct stake in participating in the growth of U.S. coal exports off the West Coast," said Steven Leer, Arch's chairman and chief executive, in a statement. "... We have the capability to service growing coal demand in Asia, the world's largest and fastest-growing coal market. We believe this first project â¿¿ along with others in the pipeline â¿¿ will provide Arch with more exposure to the seaborne thermal market and will further unlock the value inherent in our western coal assets."

Under terms of the agreement, Arch will control 38 percent of the 400-acre terminal's throughput and storage capacity to export shipments of coal off the west coast. The facility will be capable of handling vessels that account for the vast majority of the seaborne thermal coal trade for the Asia-Pacific market. The terminal is served by the Union Pacific and Burlington Northern Santa Fe railroads, which will provide Arch with the flexibility to export its southern Powder River Basin and Western Bituminous coals, and eventually coal from its recently acquired Montana reserves.

The terminal, a former aluminum smelter site, is currently operated as a bulk commodity facility. Millennium Bulk Terminals continues to work on obtaining the required approvals and necessary permits to complete dredging and other upgrades to enable coal, alumina and cementitious material shipments through the brownfield terminal, Arch said. Once completed, coal shipments could begin in 2012.

The terminal development project should create 120 temporary jobs during the build-out of the facility, and ultimately would result in 70 permanent jobs from ongoing operations at the terminal, Arch said. The construction of the export facility will generate $2.7 million in sales tax revenue for Washington state and county governments, while expected income tax revenue, once the facility is fully operational, will provide $1.2 million annually for state and county governments, according to Arch.