Fortune Coal, a subsidiary of Fortune Minerals, has entered a definitive agreement with POSCO Canada (POSCAN) and its subsidiary POSCO Klappan to form a joint venture to develop the Mount Klappan Anthracite metallurgical coal project in British Columbia, Canada.
Under the terms of the agreement, POSCAN will acquire 20% of the Mount Klappan project and, based on current capital cost estimates, will pay $181m, including $30m in upfront funding.
Fortune will hold an 80% interest in the joint venture by investing $614m and POSCAN will hold the remaining 20% by contributing $154m.
The joint venture will develop the Mount Klappan project by combining Fortune's local development and operations expertise with POSCAN's market knowledge and financial backing.
POSCAN will also fund 20% of the project's operating costs and receive 20% of products produced from the mine.