ENGLEWOOD, Colo. -- Cyprus Amax Minerals Co. said it will sell its remaining U.S. coal businesses to Germany's largest coal producer, RAG International Mining GmbH, for about $1.1 billion in cash and assumed debt.
Cyprus Amax was the fifth-largest producer of U.S. coal last year, according to Research Data International, industry consultants. The company mined 68 million tons from its properties in Pennsylvania, Wyoming, Utah, Colorado and Illinois, producing sales of $800 million.RAG, which owns coal mines in West Virginia, is expanding outside Germany as its coal production there declines. Based in Englewood, Colo., Cyprus Amax is selling assets to pay down debt, buy back shares and expand its copper and molybdenum businesses. Analysts expect the company, the fourth-largest U.S. copper producer, to buy copper mines or companies.
"They will definitely be in the shopping mode," said Wayne Atwell, an analyst at Morgan Stanley Dean Witter who has an "outperform" on Cyprus Amax stock.
Closing on the deal is expected in June. The agreement with RAG calls for Cyprus Amax to receive 15 years of production payments from its newest coal mine, Willow Creek in Utah, starting in 2000.