The $37.1 million deal gives the L&L 95% of the LuoZhou and LaShu mines, satisfied by a cash outlay of $1.7 million and transfers of the company's interests in the Zonelin coking plant (98%) and the DaPing mine (60%).
Both LuoZhou and LaShu neighbor L&L’s existing Weishe model mine.
The takeovers are part of its consolidation strategy in the province.
The two mines have a combined 34.2 million tons of low sulfur and high British thermal unit anthracite coal reserves.
LuoZhou, which has started trial production, will ramp up from 200,000 tons annually to 450,000tpa by the end of next year.
LaShu will ramp up from 150,000tpa to 300,000tpa over the same period.
Weishe, which is also in the process of increasing from 150,000tpa to 500,000tpa, will have a projected rate of 500,000tpa in 2013 and to 1Mtpa or more in coming years.
“We completed the transaction to build coal reserves, increase production capacity and increase EPS for our shareholders,” L&L chairman and chief executive Dickson Lee said.
“By leveraging on L&L's publicly listed platform in the USA and global management capability, we continue to work closely with Union Energy to realize the full potential of its mine portfolio.
“We also have a pipeline of other opportunities and strategic assets in China.”
