Under the terms of the deal, the company will also divest its idled Amonate mine, greenfield Russell County coal reserves and greenfield Pangburn-Shaner-Fallowfield coal reserves in the US.
The transaction includes about 400 million tons of proved coal reserves including about 88 million tons that are associated with the Buchanan mine.
Consol Energy president and CEO Nicholas DeIuliis said: "This is another significant event in the execution of Consol Energy’s strategy, as well as a meaningful step in continuing to strengthen our balance sheet.
"The Buchanan Mine fits into Coronado’s portfolio as a pure play metallurgical coal producer, and, in the end, this transaction bolsters the strategic position of both companies."
The agreement includes $398m cash at closing. The transaction proceeds will be used by Consol to reduce its debt.
As per the deal, the right to extract and sell gas at the mines and other properties would be retained by Consol.
Scheduled to be completed in the first quarter of 2016, the transaction is subject to customary conditions, including regulatory approvals.
Metallurgical coal company Coronado IV is backed by EMG, a private equity firm that specializes in energy and mining.
Image: Consol Energy intends to sell its metallurgical coal reserves to strengthen its balance sheet. Photo: courtesy of CONSOL Energy Inc.
