MARKETS

L&L inks deal for ZoneLin operations

US-based, China-focused L&L Energy has subcontracted the operations of ZoneLin Coal Coking in the Yunnan Province through its L&L Yunnan Tianneng Industry subsidiary.

Donna Schmidt
L&L inks deal for ZoneLin operations

The agreement was made for $US1 million fixed for five years beginning November 1, 2009, and makes TNI the exclusive consultancy and advisory outlet to ZoneLin.

The subsidiary will operate the 150,000 ton per annum coking facility, provide the working capital necessary for operations, and collect generated revenue.

The deal is expected to generate about $28 million a year in revenue, based on a coke price of $187 per ton.

L&L said the coking revenue, profit or loss from ZoneLin would be consolidated into L&L financial statements as a variable interest entity. If mutually decided, the agreement can be extended.

"We're confident that contracting of ZoneLin will increase our revenue and profits,” L&L chief executive officer Dickson Lee said.

“This new development also extends L&L’s role of becoming a leader in the region."

Last month, L&L subcontracted the operation of its Ping Yi coal mine in Pingguan, Guizhou Province, through its Baoxing Economic and Trade subsidiary in an $876,000 annual fixed-fee deal.

L&L said the agreement should generate about $15 million in revenue per year based on a basis coal price of $100/t. Opened in 2007, the Ping Yi mine has a 150,000tpa capacity and a proven reserve of 31 million tons; it is working to increase its capacity to 300,000tpa.

L&L International changed its name to L&L Energy in late 2008.

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