Cyprus Amax places coal subsidiary on block

In an effort to eliminate debt, Cyprus Amax Minerals (CYM-N) is seeking a buyer for its coal subsidiary.

Cyprus Amax Coal Co. is one of the leading coal producers in the U.S., with operations in Pennsylvania, the Powder River basin of Wyoming, Utah and Colorado, as well as Australia. Revenue in 1998 is expected to reach US$800 million on production of 72 million tons of coal.

The company would not say how much it is asking for the subsidiary.

The transaction is the best in a series of moves by Cyprus Amax Minerals aimed at liquidating non-core assets. In May, the major announced the merger of its 59%-owned gold subsidiary, Amax Gold, with Toronto-based Kinross Gold (K-T). The move enabled Cyprus Amax to eliminate as much as US$500 million in debt.

Last month, Cyprus Amax received US$305 million in cash from the sale of Cyprus Foote Mineral Co., its lithium subsidiary, to a subsidiary of Germany’s Metallgesellschaft. This sale is expected to result in an after-tax gain of just over US$100 million, which will be used partly for debt reduction.

Cyprus Amax remains a leading copper producer and the world’s largest molybdenum producer. The Englewood, Colo.-based company also holds a 31% interest in Kinross Gold (K-T).