Canonsburg-based CONSOL Energy recently purchased a 25 percent stake in CFOAM Corp., a new holding company, for $3.5 million.
CFOAM Limited owns the remaining stake.
CONSOL Energy produces high-Btu bituminous thermal and crossover metallurgical coal. CFOAM manufactures carbon foam products from coal, pitch, or lignin feedstock that are used by the aerospace, commercial product, industrial, and military industries.
“This is our first major step in the coal-to-products area, which leverages certain attractive properties of coal but with significantly lower emissions and greater value uplift potential than conventional combustion applications,” Jimmy Brock, CONSOL Energy president and CEO, said. “These products not only provide a high-margin revenue stream but also provide an intriguing new opportunity to utilize the vast resource base that our country is endowed with.”
The company estimates the total addressable market for coal-to-products is more than $15 billion annually, Brock said.
As part of the purchase, CONSOL Energy provided CFOAM LLC with a $1.1 million term loan for working capital. CONSOL Energy will appoint two members of the four-person CFOAM Corp. board and will serve as adviser on strategy, management, and operations.
In addition, CFOAM LLC provided CONSOL Energy with certain pre-emptive and anti-dilution rights.