Arch Resources announced more steps in its ongoing transition toward metallurgical coal markets by contributing its Viper thermal mine in Illinois to Knight Hawk Coal, which will operate the mine going forward. As part of the transaction, Arch’s equity stake in Knight Hawk increased to 49.5% from 48%, and Knight Hawk assumed long-term undiscounted mine closure liabilities totaling $21 million.

“We view the Viper transaction as a highly positive outcome in our ongoing efforts to identify and execute on strategic alternatives for our thermal assets,” said Paul Lang, president and CEO, Arch Resources. “Knight Hawk shares Arch’s deep commitment to safety, environmental stewardship and social responsibility, and recognizes and values the essential contributions of the Viper workforce in the mine’s ongoing success.”

Arch is also pressing forward with its plans to reduce its operational footprint in the Powder River Basin (PRB), even as it explores strategic alternatives for those assets. As a next step in this effort, Arch is proceeding with the accelerated closure and final reclamation of the Coal Creek mine, with a concerted focus on reducing what it called “highly inflated, state-calculated surety bond requirements.” The company plans to ship on its existing contracts at Coal Creek during 2021 before beginning final closure of the mine’s active pit in 2022.

Through these accelerated efforts, Arch expects to reduce the total asset retirement obligation (ARO) at Coal Creek by an estimated $40 million, or 80% of the ARO at the mine, over the course of the next 18 months. Simultaneously, Arch is laying the groundwork for systematically reducing the operational footprint at its Black Thunder mine.