L&L Energy Inc yesterday said that it has acquired a 51-per cent controlling stake in Lashu Coal Mine in Guizhou province in southwestern China from Union Energy, with an initial payment of $314,000, as the US-based and China focussed coal miner looks to expand its presence in the world's largest coal consuming country.
The Lashu Mine located in Hezhang county, Guizhou Province is expected to start production later this year and will have an annual output rate of 300,000 tons. It can be expanded to 450,000 tons.
''Upon production, scheduled for fall 2012 and fully implemented within 2013, the Mine will produce low-sulfur, high BTU, anthracite coal at the approved annual production rate of 300,000 tons on 7.17 million tons of reserves, with potential expansion to 450,000 tons and beyond on reconnaissance resources of 20 million tons.'' the company said in a statement.
Seattle, Washington-based L&L, which is exploring acquiring coal mines in resource-rich Mongolia, will make an initial payment of $314,000 and the balance that is still being finalised, will be paid in future in instalments.
L&L's chairman and CEO, Dickson Lee, said, "The acquisition of the Mine is part of our consolidation strategy in HeZhang County. We are working with Union Energy and others to identify further opportunities. We are organizing our mining assets in a focused manner, to maximize return to our shareholders."
In January, L&L had acquired a 51 per cent controlling interest in Union Energy's Weishe coal mine that holds reserves of 19 million tons in a 1.8km area
Founded in 1995 by Dickson Lee, L&L has grown from a single employee to more than a thousand over the past 17 years. It operates profitable coal mines, coal wholesale, coking, and coal-washing facilities in Yunnan and Guizhou Provinces. The company also has investing interest in Bowie Mine located at Paonia in Colorado.
It also distributes coal in China, and has long-term supply contracts with major Chinese utilities.