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MASSEY COAL CO. TO BE SPLIT UP
Publication: THE CHARLESTON GAZETTE
Published: Wednesday, June 17, 1987
Byline: BOB GEIGER
A.T. Massey Coal Co.'s operations will be split up under an agreement announced by Massey's joint owners, Fluor Corp. and Shell Oil Co.
A.T. Massey Coal Co. will become a wholly owned subsidiary of California-based Fluor. Massey Coal will keep most of its West Virginia operations, including Elk Run Coal Co. in Boone County and Omar Mining Co. in Logan, according to E. Morgan Massey, president of Massey Coal.
Shell will receive Marrowbone Development Corp. in Mingo County, according to John Irvin, manager of coal sales for Shell Mining Co. in Houston.
Irvin said Shell will also get from Massey coal shipping terminals in Newport News, Va. and Charleston, S.C., and coal properties in eastern Kentucky, including the East Kentucky Energy Corp. This former Massey subsidiary is involved in a $1 million dispute with Webster County, W.Va., officials about how much property taxes the firm should have to pay.
Fluor and Shell have jointly owned Massey Coal since 1980. E.
Morgan Massey said his company will continue to be based in Richmond, Va., and there should be no immediate change in the firm's West Virginia operations as a result of the deal.
Massey Coal was the target of a bitter 15-month strike by the United Mine Workers because Massey refused to sign the 1984 national coal agreement.
This week's announcement of Massey's division ended weeks of speculation about what would happen to the jointly owned coal operations.
Massey said coal markets have changed considerably since the partnership between Fluor and Shell was formed in 1980. "It looked like the price of coal was going out of sight and demand for coal was going to be extensive," he said. These conditions turned out to be illusions and the partnership no longer makes sense, Massey said In the longer run, Massey said, he hopes the deal will enable him to beef up the company's export sales force. He said some restrictions on Massey's exports will be removed since Massey is no longer affiliated with Shell. He also noted that Fluor is involved in power plant construction and Massey may be able to profit from this connection.
The division of the Massey holdings will reduce Fluor's debt by more than $40 million and will generate more than $100 million in cash. The coal operations that Massey and Fluor will retain produce about 18.5 million tons of coal and revenues of $650 million annually, Massey said.