BOULDER - Arch Coal Inc. (NYSE:ACI) announced today that it has completed the acquisition of Rio Tinto Energy America's Jacobs Ranch mine in Wyoming's southern Powder River Basin.

The $764 million deal allows Arch Coal to merge the Jacobs Ranch operations with its adjacent Black Thunder mine creating what some say is the largest coal mine complex in the world with a capacity of more than 140 million tons per year - about 12 percent of U.S. coal production.

"In many respects, Jacobs Ranch already exemplifies Arch's existing operations in the (Powder River Basin) - a low-cost, highly productive mine with little geologic risk, a low level of legacy liabilities and an impressive safety and environmental stewardship record," Arch chairman and CEO Steven F. Leer said in a prepared statement today.

Leer said Jacobs Ranch is the perfect addition to Arch's flagship Black Thunder operation because the mines share a six mile property line and have adjacent mining facilities along with complementary pit operations.

In merging the operations, Arch will lay-off about a dozen employees.

"We made every effort to affect as few employees as possible, and are committed to notifying employees today to ensure the process is not prolonged," Arch spokeswoman Kim Link told the Star-Tribune.

In total, the mine will employ some 1,815 workers. Arch said the mine already reduced its workforce in recent months through attrition, in anticipation of the acquisition and operational savings.

Link said Arch will first provide safety training for the approximately 630 former Jacobs Ranch employees and switch radio communications to include all the merged operations. Then on Monday, Jacobs Ranch miners will join the Black Thunder shifts.

"Integrating Jacobs Ranch into Black Thunder will require a great deal of coordination," said Link.

Jacobs Ranch comes with a lease for 381 million tons of federal coal.

Black Thunder also gains a high-speed rail load-out facility, an overland conveyor and near-pit crushing system, a 120-cubic-yard dragline, eight large electric shovels and more than 40 large haul trucks.

In total, Black Thunder mine will control six draglines, 22 shovels, more than 130 haul trucks, three rail load-outs and 20 train landing spots, according to Arch. The combined mine also will have assigned coal reserves of 1.6 billion tons (as of Dec. 31, 2008) and productive capacity of more than 140 million tons per year.

Arch estimates operational savings from the transaction will be between $45 million and $55 million annually, beginning in 2010.

Jacobs Ranch has 35 million tons of production committed and priced in 2010 and 21 million tons of production committed and priced in 2011, under existing sales contracts.

"Jacobs Ranch customers do not have the option to keep or drop existing contracts now that the parent and subsidiary are Arch Coal-Thunder Basin. A vast majority of Jacobs Ranch's customers are already customers of Arch Coal as well, so the transition has been relatively easy," said Link.

Energy reporter Dustin Bleizeffer can be reached at (307) 577-6069 or dustin.bleizeffer@trib.com. Check out his energy blog at tribtown.trib.com/post/DustinBleizeffer/blog.