Obed owner Sherritt sells coal business for nearly $1B

Canadian resource company Sherritt is selling off its entire coal business in two separate deals that will bring in $946 million.

Newfoundland-based Altius Minerals pays $481 million for coal royalty business

Sherritt is getting out of the coal business in two deals worth almost $1 billion. (The Associated Press)

TSX-listed Sherritt International Corp. is selling its entire coal business to two separate buyers for a total of $946 million.

Colorado-based Westmoreland Coal Co. will buy Sherritt's Prairie and Mountain operations in Western Canada for $465 million.

In the other deal, Altius Minerals of St. John's, N.L., will buy Sherritt's entire coal royalty portfolio and coal developments for $481 million.

"Today's transaction to divest the coal business is the culmination of a competitive bidding process which has extended over several months," company president David Pathe said in a release. "It simplifies our asset portfolio to concentrate on our core strengths, enhances our liquidity, and provides us with the opportunity to reduce our debt."

Sherritt has been one of Canada's largest coal producers but it's a diversified resource company with operations in several countries. Sherritt is one of the companies involved in a spill earlier this month where hundreds of millions of litres of contaminated water from the company's Obed Mountain coal mine made it into the Athabasca River.

The core business would include the company's oil operations in Cuba, which have been slowly and methodically built up over the past two decades. "Sustaining the oil operations will serve to support the strong, fundamental cash flow that has come to characterize this business," the company said in a release.

With files from The Canadian Press