AIDEA sells terminal to railroad

Posted: Tuesday, June 10, 2003

ANCHORAGE (AP) The Alaska Industrial Development and Export Authority's board has approved the sale of its 49 percent interest in the Seward coal terminal to the Alaska Railroad Corp. for $5.52 million.

AIDEA's decision clears the way for the railroad to finalize a separate agreement to acquire the 51 percent of the terminal owned by the Korean-owned Hyundai Merchant Marine (America) Inc.

Both transactions are contingent on final approval of a $9.6 million federal grant to the railroad to pay for the acquisition, according to Alaska Railroad spokesman Patrick Flynn.

Jim McMillan, AIDEA's deputy director for credit, said the sale of the terminal will help the railroad and Usibelli Mines Inc. secure a new contract to export coal from Usibelli's mine at Healy.

The railroad will be able to operate the coal loading terminal at a lower cost because it will have no debt on the facility, McMillan said.

The $5.52 million sale price allows AIDEA to recover its investment made in 1995 plus interest at 7.5 percent, he said.

Joe Usibelli Jr., president of Usibelli Mines, said the sale is important because it will retain the infrastructure in Seward for loading coal and will strengthen employment in Seward and at the company's mine at Healy when exports resume.

Usibelli had to lay off workers in 2002 when the contract to ship coal to a South Korea utility was suspended. The mine also supplies coal to power plants at Healy and in Fairbanks.

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