On Monday, the company said its new subsidiary DaXing-L&L (Guizhou) Coal, which is headquartered at its Hong Gou office, inked the deal with CCMC division China Chengtong Metal Tianjin.
China state-owned CCMC specialises in coal and metal trading throughout the northern China and inner Mongolia market.
“The joint sales agreement will synergize both [companies’] resources, sales network and share geological market information forming an integrated coal supply chain to service additional customers in the growing China coal market,” officials said.
The coal to be collaboratively sourced, sold and marketed will be both coking and thermal product.
L&L said the agreement could generate approximately $US150 million in revenues assuming a coal price of $150 per ton.
“We are very pleased to secure a strategic partner of CCMC's calibre – their strong existing sales channels will help expand our coal business outside the Yunnan and Guizhou provinces to the rest of China,” L&L chairman and chief executive officer Dickson Lee said.
“Going forward, this is a strong start for our new subsidiary.
“We expect this agreement to result in selling one million tons of coal in calendar 2012, with similar revenue impact in the subsequent years to come.”