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The new facility, which will open November 15, will be located in Hong Gou, Pan County in the Guizhou province.
Dashin L&L Coal will be the company’s third coal wholesale operation, and the first in Guizhou. The other two facilities are both located in the Yunnan province.
Chairman and chief executive officer Dickson Lee said that the creation of Dashin was integral to L&L’s expansion plans in the future.
“This new coal wholesale network in Guizhou will increase our visibility and assist with future acquisitions,” he said, adding that the company is working with various regional partners, the government and financial institutions to finalize our acquisitions plans.
“Currently the Guizhou province is experiencing a shortage of coal supply and with the winter months ahead, it is expected to continue into 2012,” Lee said.
“With the consolidation policy in motion and coal supply under duress, L&L will continue to increase its foothold in both the Yunnan and Guizhou provinces.”
The company projects significant additional sales revenue from the newly-opened operations.
It highlighted its focus on the Guizhou province in September, confirming that L&L is the only American-owned and US publicly listed company in the province – a region which is undergoing a consolidation that will reduce locally owned mines from 1600 down to 200 or less.
L&L is working with the province’s vice governor and energy bureau chief, and have been endorsed to take a leadership position in the consolidation.
“In an effort to increase mine size and improve production efficiency, the Guizhou Province recently announced a plan to reduce its … locally owned mines to some 40 holding companies,” Lee said at the time, adding that it is targeting 14 mine acquisitions in the region.
“The government also mandates that total coal production in the province be increased by a 40%, equating to 300 million tons per year by 2015. L&L's acquisition team has been working hard at the forefront in the consolidation process, which could result in exponential revenue growth.”
