NEW YORK--U.S. coal producer James River Coal Company (JRCC) will pay $475 million cash for International Resource Partners LP in an effort to tap the increasingly lucrative coal export market.

The deal gives Richmond, Va.-based James River access to thermal coal used by power plants as well as the higher-quality metallurgical coal used by steel companies from nine underground and surface mines operated by privately held International Resource, headquartered in Charleston, W. Va.

Those mines, in southern West Virginia and eastern Kentucky, produced 1.9 million tons in 2010, including 1.2 million tons of metallurgical coal and 0.7 million tons of thermal coal.

James River produced 9.8 million tons of coal in 2009, the latest yearly figures available, with approximately 92% of revenue from sales to electric utilities.

The purchase of International Resource "increases our offerings of metallurgical coal," and "it provides us with greater access to the international seaborne coal markets," James River's Chief Executive, Peter Socha, said in a statement.

International Resource has total reserves and resources of approximately 136 million tons, including approximately 61 million tons of metallurgical coal and 75 million tons of thermal coal.

The acquisition--which also includes International Resource's marketing and trading subsidiary, Logan & Kanawha Coal Company LLC--is expected to close in the first half of 2011.

The purchase is the latest coal deal seeking to capitalize on soaring prices for metallurgical coal.

U.S. coal producers are particularly well-positioned to take advantage of strong Asian demand for the steelmaking ingredient, as Australian flooding has disrupted global supplies.

In January, Massey Energy Co. (MEE) agreed to be acquired by Alpha Natural Resources Inc. (ANR) in a deal valued at $7.1 billion that would make Alpha the world's third largest steelmaking coal producer.

Kinder Morgan Energy Partners LP (KMP) in February agreed to handle up to 6 million tons of Massey coal a year through a Louisiana terminal.

-By Matt Whittaker, Dow Jones Newswires; 212-416-2139; matt.whittaker@dowjones.com
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