Iron-ore firm buys Alpha Natural Resources; could be biggest purchase of a U.S. coal company ever

In "the largest acquisition of a U.S. coal company in recent memory and possibly ever," Cleveland-Cliffs Inc., the nation's biggest producer of iron ore, is buying Alpha Natural Resources, is one of the biggest producers of metallurgical coal in the U.S.," and the leading exporter, The Wall Street Journal reports.

"Tight supplies of both commodities have put miners and steelmakers on an acquisition spree to secure deposits and active mining operations," Kris Maher writes. "Experts expect consolidation among U.S. producers -- which had been among small and midlevel producers -- to continue, with growing interest from big international miners and steel companies."

The new company will be called Cliffs Natural Resources and Alpha shareholders will own 40 percent of it. "Alpha has expertise in extracting high-quality metallurgical coal using smaller operations in difficult underground conditions found throughout Appalachia," Maher reports. The company, based in Abingdon, Va., has 3,640 employees and mines in Kentucky, Virginia, West Virginia and Pennsylvania. (Read more)

"The global headquarters as well as the iron-ore operation will remain in Cleveland, Ohio, while the headquarters for the coal operations will remain in Abingdon," Keith Strange reports for The Coalfield Progress in nearby Norton, Va. There's a strong local angle, Strange notes: Cliffs President and CEO Joe Carrabba "began his career in Wise County in 1974" and met his wife there. “I still own a home in Wise where my mother-in-law lives to this day,” he told Strange. (Read more; subscription may be required)

UPDATE, July 22: Strange reports that Harbinger Capital Partners, a hedge fund that is the largest single stockholder of Cleveland-Cliffs, with 18 percent, "threatened to block the $8.06 billion purchase, saying it is not in the best interest of its shareholders." (Read more)

Meanwhile, Chris Kraul of the Los Angeles Times says high oil and gas prices may spur demand for coal, despite doomsday warnings from environmentalists. Read more here.