The deal includes 20,000 tons of thermal coal each month for the next eight months and can be expanded for another eight. Assuming the average sales price of about $120 per ton, L&L has projected $19 million in revenues.
Yongfu Power, based in the Guangxi province is a wholly-owned subsidiary of China Guodian Corporation and the owner of more than 180 power facilities in 31 provinces.
The agreement is the second in as many weeks for the Seattle-based miner. On April 4 it announced its DaXing subsidiary will supply 20,000 tons of coal monthly for a year to Datang International Power Generation.
It now has 400,000 tons of coal under contract in the new deals and is eyeing more than $50 million in new revenues
Datang and Guodian are both top-five power producers in China.
“I am very pleased with the progress our team has accomplished in recent weeks, adding two large wholesale supply contracts,” chairman and chief executive officer Dickson Lee said.
“Guodian Corporation is a giant in power generation and clean energy in China. We look forward to growing our relationship and exploring additional projects with them in the future.”
L&L’s China-based activities have escalated in recent months with the acquisition of a majority stake in a Guizhou province anthracite complex last January and the recent election to the board of Chinese coal expert and Shenhua Group veteran Jingcai Yang.