Walter Buys Mobile River Terminal - Analyst Blog

The producer and exporter of premium coal  Walter Energy Inc. (WLT) announced that it has acquired the assets of Mobile River Terminal Co. in Mobile, Alabama from a subsidiary of U. S. Steel Corp.(X). The company will use the premium coal from these assts for export to its global consumers.

Walter's decision to acquire the Mobile River Terminal has a strategic significance. This acquisition will not only ensure unrestricted shipping capacity but will also support Walter's long-term coking coal production plans in Alabama.

This acquired facility is located near the McDuffie Terminal from where Walter Energy presently carries out its coal exports to customers in South America and Europe. Hence, utilizing the Mobile River Terminal, Walter will continue to incur low mine-to-port costs with less dependence on third parties to export the coal. The strategic locations of Walter's mine allow the company to transport coal to terminal by either rail or barge.

Recently, Walter Energy decided to acquire Canada's Western Coal Corp. through a cash and stock deal to meet the increasing demand for premium coal from Asian steel makers.

The company competes head to head with Arch Coal Inc. (ACI) and Massey Energy Co. (MEE). On a competitive landscape the net margin of the company fared better than its peers in the trailing twelve months.

Walter Energy currently retains a Zacks #3 Rank (short-term Hold rating). We maintain our long-tern Neutral rating on the stock.

Tampa, Florida-based Walter Energy is one of the leading U.S. producers and exporters of premium metallurgical coal to the global steel industry in the United States.

 
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