Bluefield Daily Telegraph, Bluefield, WV

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July 22, 2008

Steelmaker acquires coal mining group

WELCH — The world’s largest steelmaker has bought out a southern West Virginia coal mining group, making it the second such acquisition to impact local mines in a week’s time.

Luxembourg-based ArcelorMittal announced Monday its agreement to purchase Concept Group, which has several mines in the Gary and Caretta communities in McDowell County.

This infusion of new capital is good news for southern West Virginia, Coal Association President Bill Raney said.

“We think it’s very, very positive in the sense of the infusion of capital and the abilities of those people who, through their skills, energy and very hard work, have put together successful companies,” Raney said.

Among the local mines owned by Concept are XMV, Inc., mines No. 36 and No. 37 at Elbert, XMV, Inc., Mine No. 35 near Gary, and XMV, Inc., Mine No. 32 at Caretta.

The purchase of the mining group by the largest steelmaker in the world “is a real testament to the managers, owners and miners of these companies,” Raney said.

Just last week, a merger was announced between Midwest iron ore pellet-maker Cleveland-Cliffs and the Southwest Virginia coal-mining company Alpha Natural Resources.

Steelmakers use high-grade coal to make their products, and metallurgical coal found in the coalfields of the two Virginias sets a global standard, Raney said last week after the Cleveland-Cliffs-Alpha merger.

The practice of steelmakers owning their own mines was common in the two Virginias during the 1930s and ’40s when companies such as U.S. Steel and Bethlehem Steel owned mines across the region. “Slowly, they got out of the coal business,” Raney said. “Now, we’re seeing the steel industry coming back in the coal business.”

The current pricing environment for coal is “probably as strong ... as we’ve every seen in our industry,” Raney said. “Much of it ties to worldwide supply and demand.”

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