Founded in the mid 1980s, Cumberland is now one of the largest privately-held coal producers in the US, with mostly underground mines in southwestern Virginia and eastern Kentucky. It controls an estimated 416 million tons of contiguous coal reserves as well as two major preparation plants that connect to the CSX and Norfolk Southern railroads.
Last year, Cumberland posted $550 million in revenues and produced roughly 7.8 million tons of coal. EBITDA was $115 million, despite a tough economy.
Cumberland has been profitable every year since inception and has a strong safety record, which is critical as the regulatory environment gets tougher. The company has the advantage of a low-cost source of coal and has built a highly-efficient operation. And combined with Massey, there should be further opportunities to reduce costs because of duplications and economies of scale. The deal is expected to be accretive to earnings within the first year.
Last year, Cumberland posted $550 million in revenues and produced roughly 7.8 million tons of coal. EBITDA was $115 million, despite a tough economy.
Cumberland has been profitable every year since inception and has a strong safety record, which is critical as the regulatory environment gets tougher. The company has the advantage of a low-cost source of coal and has built a highly-efficient operation. And combined with Massey, there should be further opportunities to reduce costs because of duplications and economies of scale. The deal is expected to be accretive to earnings within the first year.
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