US coal producer Arch Resources Inc. agreed to merge with rival Consol Energy in a $2.3-billion deal aimed at creating a North American mining heavyweight to deliver the fuel around the world.

The companies announced the transaction in a statement Wednesday after the deal talks were reported earlier by Bloomberg. Under the terms of the merger agreement, Arch stockholders will receive a fixed exchange ratio of 1.326 shares of Consol stock for each share of Arch common stock. Consol shareholders will own about 55% of the combined company, to be called Core Natural Resources.

The new company will own 11 mines producing thermal coal for power plants and metallurgical coal for making steel. While the dirtiest fossil fuel is a major driver of climate change, it’s also among the commodities most crucial to the global economy. Demand for steel, and the materials used to produce it, is growing over the long term, while consumption of coal for electricity generation remains strong even as nations seek to shift to cleaner energy.

“The markets are out there,” Deck Slone, Arch’s senior vice president of strategy, said on a conference call Wednesday. “You’ve got to get out there into the seaborne markets.”

The transaction is expected to close by the end of the first quarter, pending regulatory approvals. Core Natural Resources will have ownership interests in two export terminals on the US East Coast, which are key to the company’s export strategy. The company, to be based in Pennsylvania, will be able to export as much as 25-million tons a year, the most of any North American coal producer.

Both companies are dependent on customers outside of North America, and that shipping capacity will give the combined venture a strategic advantage, said Andrew Blumenfeld, director of data analytics at McCloskey by Opis. “Exports are what make this work,” he said in an interview.

And this transaction may not be the last, said Blumenfeld. Once the Core Natural Resources merger is complete, he expects to see the combined company pursue additional deals, most likely in the metallurgical coal market. “I think this might be just step one,” he said.

Executives stressed on the call that the two companies have little operational overlap, which should help the tie-up win regulatory approval. Arch’s planned move to merge its operations in the Powder River Basin with those of rival Peabody Energy was rejected by a federal judge in 2020.

Arch shares gained 1.4% at 11:53 a.m. in New York on Wednesday and Consol climbed 3.7%. Arch had declined 24% this year before the deal was announced, while Consol had dropped 5.8% over the same period.

Earlier this year, Consol faced a significant threat to its operations after a catastrophic bridge collapse choked off Baltimore harbor and curtailed shipping to the company’s export terminal a few miles away. Consol has focused on boosting overseas shipments in recent years amid shrinking domestic demand for the dirtiest fossil fuel. Baltimore’s port has since fully reopened.

Moelis & Company LLC advised Consol, while Perella Weinberg Partners advised Arch.

“This transaction demonstrates our confidence in the future of coal,” Jimmy Brock, Consol’s CEO, said on the call Wednesday.