NEW ORLEANS — CN announced a definitive agreement to sell substantially all of the assets of IC RailMarine Terminal Company (ICRMT) to Raven Energy an affiliate of Foresight Energy LLC and the Cline Group for $73 million.
ICRMT is an indirect subsidiary of CN, located on the east bank of the Mississippi River at Convent, La., west of New Orleans. The terminal stores and transfers bulk commodities and liquids between rail, ship and barge, serving customers in North American and global markets.
CN expects the transaction to close in approximately 45 days, following receipt of regulatory approvals. Upon closing, CN would enter a 10-year rail transportation agreement with Savatran LLC, another affiliate of Foresight and Cline, to haul coal from four Illinois mines to theConvent transfer facility. Under the agreement, Savatran would ship a minimum annual volume of coal via CN.
Luc Jobin, executive vice-president and chief financial officer of CN, said: “We are pleased to have concluded an agreement for the sale of ICRMT assets, with plans to enter into a long-term transportation agreement for CN coal shipments to the terminal. These initiatives will allow CN to make better use of its southern rail corridor while expanding its participation in the growing export of Illinois Basin coal.”
Michael Beyer, chief executive officer of Foresight Energy, said: “The acquisition of these terminal assets, as well as the signing of the transportation agreement with CN, is an important next step in our continuing investment in infrastructure assets that provide transportation and market optionality for our low-cost coal mining operations. This firms up the logistics for our coal sales into the international coal markets, which are a significant and growing part of our business.”
Foresight will expand the capacity of the facility to eight million tons of export coal per year, from a current capacity of approximately four million tons, with the potential for an additional eight-million-ton expansion as market conditions warrant.