Arch Coal sells Utah operations for $435 million

June 28 (Reuters) - Arch Coal Inc said on Friday it had sold a group of thermal coal mines in Utah to privately held Bowie Resources for $435 million in cash as the U.S. company looks to divest non-core assets and focus on its metallurgical coal projects.

Bowie will take over Arch's wholly-owned subsidiary Canyon Fuel Co, including the Sufco, Skywall and Dugout Canyon thermal coal mines in Utah. Canyon Fuel has a 725-person workforce.

Arch said the sale will streamline its portfolio and allow it to focus on upgrading its metallurgical coal platform in Appalachia. The company will hold onto its other thermal coal projects, including the rich West Elk mine in Colorado.

The deal is expected to close in the third quarter.

Coal prices have dropped sharply in the last couple of years, but metallurgical coal, used in steelmaking, is still more valuable than thermal coal, which is used in power generation.

Thermal coal is also under pressure after President Barack Obama announced earlier this week efforts to craft new emissions rules for thousands of power plants, the bulk of which burn coal and which account for roughly a third of the country's greenhouse gas emissions.

FBR Capital Markets & Co and Deutsche Bank are acting as financial advisers to Arch for the transaction, while Morgan Stanley & Co is acting as the financial adviser to Bowie.