PITTSBURGH, Pa. — Consol Energy, in a move to shift focus toward natural gas production, will sell five of its longwall coal mines in West Virginia to a subsidiary of Murray Energy Corporation based in St. Clairsville, Ohio.

The $3.5 billion sale was announced Monday morning.

The Consol mines that will be sold are McElroy Mine, Shoemaker Mine, Robinson Run Mine, Loveridge Mine and Blacksville No. 2 Mine.  The mines combined to produce 28.5 million tons of coal in 2012.

“The sale of these five mines, assets that have long contributed to America’s economic strength and our company’s legacy, was a very difficult decision for our team,” said J. Brett Harvey, Consol’s chairman and CEO.

Consol’s River and Dock Operations are also included in the transaction.

During a conference call with shareholders Monday, Harvey and other company officials said Consol would reinvest in its natural gas operations in the Mountain State. “We have a sizeable Marcellus shale footprint in West Virginia which will take a significant amount of labor and capital to develop,” said Harvey.

Nick Deluliis, Consol Energy president, said the move is necessary to generate growth for the company.  “Natural gas is a growth outlet for the company,” said Deluliis on Monday’s MetroNews “Talkline.”

“That thermal coal segment, we don’t see it going away. We see those mines operating for 20 years plus out into the future,” he said of the sites Murray is buying. “But the prospects for growth, in terms of creating incremental production, or pricing expansion beyond the stable, profitable cash flows we see there, is limited compared to something like natural gas.”

Senate President Jeff Kessler said Consol’s move is a sign of changing times. “Energy production in this state, which has been so reliant on coal, is transitioning into the gas,” Kessler said.

United Mine Workers of America President Cecil Roberts said the sale was “no great surprise” and would change nothing for union works at the five coal mines set to be sold.  “Our collective bargaining agreement does not go away with this transaction and our members remain covered by its provisions,” Roberts said.

Consol officials said the goal was to close the deal with Murray Energy, which is subject to a number of conditions, before the end of the year.

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Comments

  • Coolmnr

    Very smart business move on Consol's part. Hope Murray makes good on retirees. Current Consol employees at sold mines, brace yourselves for cuts.
    Everyone wants to point fingers, sometimes, as in this case, look at the man in the mirror. I never saw so many miners with such huge senses of entitlement. Try this: go to work, WORK a full shift, shower, go home, repeat!

    I have worked for several mining companies and by far Consol's has more lazy, absentee miners in the biz. NOT ALL, but A LOT!!!

  • Gary in Fairmont

    While it may be true that the miners "made Consol what it is", it's not like they weren't well compensated in the process. The 1920's were a LONG time ago...

  • t.court king

    I truly feel sorry for the miners that are about to endure the stupidity of a Murray owned company. Your enjoyable work experience is limited. Murray will feed the foremans mouth with dollars and intimidation. Murray hates unions and will do everything he can to bust them. I'm sorry to the consol people for your loss

  • RB

    I hope the union membership remembers that Cecil said nothing would change. Because it will. That is the one thing that is certain. Whether it is for the better or worse only time will tell.

  • polarbear

    The only coal that will have value in the near futuer is anthracite coal . China is even moving away from coal power plants. Consol isnt the only major coal co. looking to get out of coal and into gas. The writting is on the wall. Once we have more gas wells the chemical industry is going to make a huge come back in WV. Many chemical processes use alot of natural gas. So If we can get them to come to WV they wont have to ship the gas via pipeline.

  • Bruiser

    IF anyone thinks this administration is for the American people, I am not sure what you are smoking. Over 300 coal powered plants have been shut down, which eventually will mean very high electric bills. The Obamacare MESS has increased mecical care to unbelievable, mine has increased $1800 for the year and that is low compared to some. ALL of this has a major effect, whether you like it or not, companies are in business to make money, we the union worker better wake up, America better wake up.

  • old miner

    Why do we not turn coal into gasoline & diesel for cars & trucks? If we did that we would be paying $2 or less at the pump and all monies would stay in the USA.

  • john layman

    the umwa is in for the fight of their life,just ask the former employees of north american coal corp.former consol employees say hello to corn cob bob murray. will the last union miner in wv please turn off the lights. thanks to obama and the epa.

  • Coal2Gas

    I worked in the Coal Industry and got out before it was to late. Now I'm in the Gas industry.. Sorry to break it to all the miners but gas is now king.. There's a reason Consol is investing in it, because it's the future.. No matter how you slice it. So I suggest the coal miners try to jump on board now.

  • cutty77

    What Kills WVU in Business is The Lawyers in This State. Who runs The State House,The Lawyers. This is why people don't want to do business in our State. Law Suits out the ying yang.

  • Spell Checker

    Guess we'll also blame this on our President and the EPA rather than the Free Market.

  • formerWV

    Why do people repeat the idiotic rhetoric purveyed by the left that Natural Gas is killing the Coal industry. The UMWA, EPA and the liberal progressives are killing the Coal industry. It is a logical phallacy to believe that gas and coal can only exist exclusive of each other. "Consol" in one form or another has been a Natural Gas E&P for over 50 years. This is not the reason coal is going downhill. If people were smart they would quit whining about natural gas and they would start getting trained and employed by that industry. You might have voted "against" Obama but you voted for Manchin, Rockefeller, Byrd, Rahall etc... West Virginians need a government lesson, Obama doesn't rule the US, there is process in play and West Virginians keep voting the same players in.

    • Shadow

      You forgot to mention the WV Legislature which has a big hand in why WV doesn't get any new businesses and what is here looks to leave..No company is going to come into WV unless it is into mining, timber or natureal gas as there is no incentive, just burdensome taxes and stupid laws.

  • blugldmn

    It's odd people are worried about future generations with regard to depletion of fossil fuels but not with crushing federal debt.

    Mankind will be depleted before the fossil fuels are..... Derp!

  • ratman

    blugldmn, this is what happens when you vote FOR Obuma twice. I would have thought you people would learn the first term.

  • Paul

    Murray didn't pay Consol $3.5 Billion to blame the government and put up a "Closed sign". There's a lot of manufacturers and other's, like the glass industry, in this state that just got a CLOSED sign and out of a job.