There’s a new coal mining giant in Appalachia.

Cleveland-Cliffs Inc., the largest producer of iron ore pellets in North America and a major supplier of metallurgical coal, announced it is buying coal producer Alpha Natural Resources in a deal valued at $10 billion.

Cleveland-Cliffs is headquartered in Cleveland, Ohio. The company operates six iron ore mines in Michigan, Minnesota and Eastern Canada, and three coking coal mines - the Pinnacle and Green Ridge mines in Pineville, Wyoming County, and the Oak Grove Mine in Adger, Ala.

Alpha Natural Resources is headquartered in Abingdon, Va. The company was formed in 2002 from the coal assets of Pittston Coal Co. In 2003 the company acquired Coastal Coal Co., American Metals and Coal International, and Mears Enterprises Inc. In 2005 Alpha acquired numerous mines, reserves and operations in West Virginia and Virginia from the Nicewonder coal group. Last month Alpha acquired Arch Coal Inc.’s Mingo Logan-Ben Creek coal mining assets in West Virginia.

Alpha has 33 active underground mines, 24 active surface mines and 11 coal preparation plants in Virginia, West Virginia, Kentucky and Pennsylvania. Alpha’s West Virginia properties are operated as the Whitetail business unit near Kingwood, Preston County; the Brooks Run North unit near Erbacon, Webster County; the Brooks Run South unit at Kepler and Litwar, and the Callaway business unit at Black Bear.

Cleveland-Cliffs and Alpha said in a joint statement that the combined company will be renamed Cliffs Natural Resources. It will have nine iron ore facilities and more than 60 coal mines in north and South America and Australia.

Cliffs Natural Resources will have estimated 2008 annual revenue of nearly $6.5 billion and annual sales volume in excess of 30 million tons of iron ore, nearly 18 million tons of metallurgical coal and will ship about 17 million tons of steam coal.

The deal puts the combined company in the Appalachian coal production big league with the likes of Consol Energy and Massey Energy.

Coal companies are flush with cash from record-high prices. Bill Raney, president of the West Virginia Coal Association said today, “When you look at the overall economy and what’s going on in the energy field, it’s absolutely unbelievable. The Appalachian region is somewhat the antithesis of the remainder of the country.”

Today’s deal could signal a new round of mergers in the industry, which remains fragmented. In April St. Louis-based Patriot Coal agreed to acquire Charleston-based Magnum Coal in a $709 million deal.

Find More Other News : Coal, Company, Exploration, Mine Trade & Market, Mining Finance, Mining Investment, Mining Top News