Vulcan sells 25-year quarries royalty

US aggregates producer Vulcan Materials Company has entered into an agreement with Plum Creek Timber Company, Inc. that will see the timber firm acquire an interest in the future production at four quarries in Atlanta, Georgia, in a long-term deal that will enable Vulcan to unlock value to reinvest in other projects.

The transaction will see Vulcan receive US$ 154 million in exchange for a percentage royalty interest in 255 million tons (232 million tonnes) of aggregate production over approximately 25 years. Vulcan will maintain full ownership and operational control of the quarries, fixed assets, and land.

Donald M. James, chairman and CEO of Vulcan, said: "In Plum Creek, we have a partner that shares our long-term view of the value and growth in the aggregates business and is investing based on that view. This transaction provides us capital to deploy in strategic investments in our aggregates business and to strengthen our balance sheet."