L&L to acquire 51% stake in the Weishe coal mine

30 January 2012 (Last Updated January 30th, 2012 18:30)

US-based L&L Energy has acquired a 51% stake in the Weishe coal mine located in China’s Guizhou province for a total consideration of $16.2m.

US-based L&L Energy has acquired a 51% stake in the Weishe coal mine located in China's Guizhou province for a total consideration of $16.2m.

Owner Union Energy will receive three million L&L shares at $5.396/share for the coal mine.

The company said that the Weishe mine generates high quality, low sulfur, anthracite coal, and is one of three newly constructed mines owned by Union Energy in Guizhou Province.

The Weishe mine deal is anticipated to add 124,000 tonnes to L&L's production and $19.6m in revenue by the end of April 2013.

L&L said the mine is expected to be expanded to produce 450,000 tonnes of coal annually over the next few years.

L&L Energy Chairman and CEO Dickson Lee said: "L&L Energy has been focused on executing our plan for the Guizhou consolidation. With the recently established Hong Gou operational office in Guizhou, the government's approval of our new wholesales license, and now the addition of the Weishe Mine, we are positioning ourselves well to fully execute the two one millions ton wholesale agreements negotiated in the fall of 2011."

"The management team at the Weishe mine is very strong and will be excellent addition to L&L as we scale at a faster pace," he added.

L&L board member Syd Peng commented that the Weishe mine is one of many new mines that the company is targeting in order to upgrade its mining portfolio.

Union Energy owner Po Shui said: "I believe in L&L and am pleased to take common shares as payment. I also look forward to the possibility of joint venturing with L&L on two other Union Energy mines."

Two mines of Union Energy are scheduled to begin production this year.