Arch Resources, Inc. (ARCH) early last week shunned the idea of making a joint venture with Peabody around thermal assets.
The decision came after a ruling by the U.S. District Court ordering blockage of the transaction. Moving forward in an aggressive way through its strategic pivot to excel in steel and metallurgical markets is the best way for company as well as its shareholders, as determined the company following the ruling. At the same time there is also a need to increase efforts to explore alternatives for its thermal assets.
Arch is strongly opposes with the verdict and remains believing that the joint venture would be the best way out in the interest of all stakeholders. After going through extensive discussion and consideration, the companies however decided not to continue legal process. The time required to go through further legal process filing an appeal as well as resources and costs involved in the process bring the companies to discontinue their legal efforts.
As the court’s decision came to the disappointment of the company, it is now in plans of full throttle the steel and metallurgical market efforts, said Chief Executive Officer of Arch, Paul A. Lang. The metallurgical products by Arch are some of the world’s highest quality products it has been providing the global markets with. The company is efficiently making progress towards establishment of its world-class Leer South metallurgical mine in 2021.
With a clearly defined purpose and distinctively prioritized strategy, Arch is well aligned for growth and success in moving forward. This will lead the company to become a leading producer of metallurgical products for the steelmaking industry, Lang said.
After the today’s decision, Arch will now intensify efforts to explore strategic alternatives for its thermal assets. The alternative could be a possible divestiture, but meanwhile the company will also be evaluating opportunities to limit operations at those mines, lessen asset retirement commitments and devising self-funding strategies to pay those long-term liabilities off, he added.