L&L inks MOU with Chinese coal wholesaler

US-based and China-focused operator L&L Energy has entered into a deal with Chinese coal wholesaler and logistics firm Tianjin Fuhao Industrial under which the pair will explore international expansion opportunities.
L&L inks MOU with Chinese coal wholesaler L&L inks MOU with Chinese coal wholesaler L&L inks MOU with Chinese coal wholesaler L&L inks MOU with Chinese coal wholesaler L&L inks MOU with Chinese coal wholesaler

L&L Energy chairman and CEO Dickson Lee.

Donna Schmidt

L&L has already signed the memorandum of understanding with the Tianjin City and province-headquartered Tianjin Fuhao, which is a subsidiary of major coal, steel, electricity and minerals-centered Tianjin Materials and Equipment.

L&L chairman and chief executive officer Dickson Lee called the strategic partnership a win-win.

“L&L has a strong foothold and track record in the southwest China coal industry, and Tianjin Fuhao is a leader in coal logistics and infrastructure in the critical Bo Hai Bay region in China's north,” he said.

“Both parties see tremendous synergies within China, especially with the accelerated consolidation in Guizhou, as well as in the joint exploration of international energy markets, particularly across the Pacific.”

Among the miner’s points of growth in 2011 was a late May announcement that it had set up its own wholesale arm – the Yunnan L&L Tai Fung Coal Company in China’s Yunnan province.

Tai Fung includes a newly established coal wholesale operation as well as its existing Hong Xing washing facility.

L&L holds 98% of the project in joint venture with an unnamed entity, and expects its annual revenue to total $US81 million.

The wholesale operation is expected to move 100,000 tons of coal per year, which will add an estimated $17 million in revenues, and would reap revenues of about $66 million from an expansion of Hong Xing that will up its annual process budget to 600,000t.

L&L publicly announced the venture this week but held a grand opening ceremony with the local industry, business leaders and government officials on May 19.

“Tai Fung will utilize the rich local coal resources and market to improve our foothold in the Yunnan province,” Lee said at the time.

“This is an important step for L&L to continue on its path to becoming one of the largest consolidators in the region.”