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Rail News Home M&A

3/6/2006



Rail News: M&A

NS sells 42-mile Tennessee line to coal shipper



Norfolk Southern Corp. has landed a deal for a low-density branch line, but the buyer isn’t a regional or short line. Central Appalachian coal producer National Coal Corp. recently purchased a 42-mile line between Oneida and Devonia, Tenn., from NS for $1.96 million. Through its subsidiary NC Railroad Inc., the coal shipper acquired the trackage to gain rail access to its largest reserve.

“The reserves were previously uneconomical to mine due to high trucking costs and road limitations,” said National Coal Chief Operating Officer Ken Hodak in a prepared statement. “Increased access to this area by rail will eliminate present obstacles, resulting in production improvements.”

National Coal plans to spend about $3 million to update a preparation plant and $2 million to restore the rail line by the third quarter. The company established new subsidiary NC Rail Inc. to manage the line’s operation and maintenance. Earlier this year, National Coal created NC Railroad to operate and manage the company’s rail lines.


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