CHARLESTON, W.Va. — Jim Justice paid Mechel OAO $5 million in cash last week for Bluestone Coal in Southern West Virginia, about six years after selling them the same mines for $436 million.
Justice, a billionaire and owner of The Greenbrier, sold the operations to the Mechel Russian conglomerate in 2009 for $436 million in cash and 83.3 million preferred shares of Mechel stock. The deal also included Mechel agreeing to assume about $132 million in debts Bluestone Coal had run up. Bluestone Coal was a subsidiary of Bluestone Industries, based in Beckley.
Today, Mechel’s Bluestone mines are closed.
Justice said his new company, called Bluestone Resources Inc., will reopen mining operations and create 150 new coal mining jobs within the next three months and additional jobs in the future.
In a statement released on Wednesday, Mechel Bluestone reported it had been losing an average of $60 million annually since 2012.
“Selling Mechel Bluestone will not only enable us to avoid these losses, but also takes some $140 million of liabilities off the group’s balance sheet and allows us to avoid over $160 million worth of legal risks,” Mechel OAO’s Chief Executive Officer Oleg Korzhov said in a statement. “The sale will allow us to focus the freed cash flows on servicing the company’s debt.”
According to Mechel’s website, the transaction also includes future royalty payments of $3 a ton from Justice for all coal mined by Bluestone in the future…