Through its subsidiaries, L&L Energy operates coal mines, coking, and coal washing facilities in the Yunnan and Guizhou Provinces of China. Using expertise gained in the U.S., the company is using improved mining standards in China to gain a competitive advantage.
L&L today announced that it entered into an agreement to acquire a 51% controlling interest in the Weishe coal mine located in the Guizhou Province of China from the Chinese miner Union Energy. This mine produces high quality, low sulfur anthracite coal. The company will acquire the interest for a purchase price of approximately $16.2 million to be paid in the form of three million LLEN shares at $5.395 a share.
The Weishe mine has reserves of 19 million tons of coal. It is expected to be expanded to 450,000 tons of annual production of coal over the next five years. The Weishe mine is anticipated to produce about 124,000 tons of coal in the current fiscal year, sold at an average price of $158 a ton.
This acquisition is the first such purchase made to upgrade the company's mining portfolio for better safety and mechanization. There is a strong possibility that L&L may add to its portfolio through other joint ventures with Union Energy, which has two other newly constructed coal mines in the same area that will begin operations later this year.
For further information about L&L Energy and its coal business in China, please visit the company's website at www.llenergyinc.com
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