Arco May Spin Off Coal Mine Operations
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Atlantic Richfield Co. said Tuesday that it is considering withdrawing from the coal mining business to focus on its main business of petroleum production, refining and retail fuel sales.
Los Angeles-based Arco’s coal assets totaled $1.75 billion worldwide at the end of 1996. The assets are concentrated in the U.S., where Arco is the fourth-largest coal producer, and in Australia.
“While Arco has some of the best coal assets in the world, we no longer regard them as part of our core business,” said Mike Bowlin, Arco’s chief executive.
In a statement, Arco said it is considering spinning off a new stand-alone company to be formed from coal operations in Wyoming, Colorado and Utah.
In December, a venture owned by Arco and Japan’s Itochu Corp. bought Coastal Corp.’s Western coal operations for $615 million in cash. Arco said the purchase of the Coastal coal assets gave its domestic coal operations sufficient size to compete effectively.
Net income from coal operations for 1995 and 1996 was $75 million and $60 million, respectively.
Arco shares lost $2.875 to close at $132.125 on the New York Stock Exchange.
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