Sandvik Ground Support inks deal to establish local US manufacturing joint venture

Sandvik has signed an agreement to form a joint venture with Alpha Metallurgical Resources (NYSE: AMR) through which it will establish local manufacturing for its ground support business in the US market.

In addition to the joint venture, in which Sandvik will hold a 51% stake and Alpha 49%, the setup also includes a long-term exclusive supply agreement with Alpha.

“Re-entering the US ground support market with a local manufacturing presence is strategically important, and this initiative will allow our ground support business to strengthen customer relationships, shorten lead times and build a scalable platform for long-term growth in North America,” said Mats Eriksson, president of Sandvik Mining.

“Creating this joint venture with Sandvik is a step in securing our supply chain by manufacturing more of our mining materials here in Central Appalachia,” said Andy Eidson, chief executive officer of Alpha Metallurgical Resources. “We are excited about the expected benefit to Alpha and, more broadly, to West Virginia.”

Production is planned at a new 100,000-square-foot facility in West Virginia, primarily focused on rock bolt and resin capsule manufacturing, but with potential to expand the product offering over time.

In addition to the long-term supply agreement with Alpha, the joint venture will also support sales to third-party customers.

Alpha is a leading US-based producer of high-quality metallurgical coal, which is a critical component in traditional steel production. With a portfolio of mining operations primarily located in Central Appalachia, Alpha serves a global customer base across North America, Europe, South America and Asia.