High temperature in Southwest China backs coal demand

Saturday, 27 Aug 2011

It is reported that China Guizhou, Chongqing, Sichuan, Yunnan and other southern regions incur persistent high temperatures as entering into August. The maximum temperature even beats the record high. As a result, Southwest China eyes tighter power supply which means more serious thermal coal requirement.

Less rainfall drags hydropower output down. The crumble of hydropower adds more strains to power plants. To make things even worse, the coal output declines for the recent integration. The local governments move forward the safety inspection of coal mines which curtails coal production.

Meteorological department forecast torrential rain will take place in the southwest next three days. By then the temperature will come down significantly which not only eases the drought but also the tight power supply. In the later phase, power shortage still exists in Southwest China and the robust thermal coal demand will bolster coal price in the near term.

(sourced from MySteel.net)

L & L Energy Announces Acquisition of DaPing Mine; Facility to Add 150,000 Tons of Met Coal Production

Mon Mar28, 2011

Acquisition to add estimated $36 million in annual revenues and $11 million net income for L&L

SEATTLE, March 28, 2011 /PRNewswire/ -- L & L Energy, Inc., (Nasdaq: LLEN) ("L&L" or the "Company"), a U.S.-based company founded in 1995 with coal mining and distribution businesses in China, announced today that it has entered into a contract to acquire a majority controlling interest (60%) of the DaPing coal mine ("The Mine" or "DaPing"). The acquisition became effective on March 15, 2011.

The DaPing mine is located in PanXian, Guizhou Province in China. The mine currently produces approximately 150,000 tons of high-quality, low-sulfur metallurgical coal per year and is expanding to 300,000 tons of production capacity, which is expected to be completed in 2012. The Mine is expected to generate an estimated $36 million in annual revenue based on current production capacity and an average coal price of $240 per ton. The Mine is expected to contribute an estimated $11 million in net income attributable to L&L for the fiscal year ending April 30, 2012.

Pursuant to the agreement, L&L and the current owner of DaPing will form a U.S. joint venture company in China (the "JV"). L&L will contribute approximately USD $18 million in exchange for management control and 60% equity of the new joint venture company on a net equity basis. An additional $3 million in capital expenditures is planned to be injected by L&L for the improvement of safety and operational efficiency of the mine. In keeping with the Company's acquisition strategy, payments to the DaPing purchase price will be in installments. The current owner of the Mine will contribute mining rights and all mine-related assets to the JV.

Dickson Lee, Chairman and CEO of L&L, stated: "This agreement represents an important step forward in our long-term growth strategy. By acquiring a majority stake in the DaPing mine, we will be better positioned to meet the rising coal demand in China and more specifically Guizhou Province, which is undergoing rapid industrialization due to the Chinese government's economic development initiatives. The current owner of DaPing has a profitable operating history and close relationships with distributors in the region. We expect to expand upon its already profitable operation, which is expected to significantly contribute revenue and net income to L&L's operations."

Mr. Lee continued, "With our strong reputation, we are very well situated to benefit from government policies encouraging the consolidation of smaller mines. We will continue to pursue strategic acquisition opportunities and look forward to updating shareholders on our progress in the months ahead."

About L & L Energy

L & L Energy (Nasdaq: LLEN), founded in 1995 and headquartered in Seattle, is primarily engaged in coal mining, washing, coking and distribution in Yunnan and Guizhou Provinces. The Company also has marketing offices in Shenzhen, Guangzhou, Hong Kong and Taipei. The Company's major products are in thermal and metallurgical coals. For more information, see www.llenergyinc.com.

(sourced:PRNewswire)

Guizhou, Shanghai cos. to jointly develop coal resources

Mar 1, 2011

Double Dragons Inc., based in Guizhou province of northwestern China on Feb 28 signed a cooperation agreement with Shanghai Yunfeng Group to jointly establish a large coal group for developing coal resources in Guizhou, Xinhua News Agency reported.

With a joint investment of nearly 2 billion yuan, the new coal group would mainly engage in coal production and deep-processing in Guizhou. It plans to have production capacity over 10 million tonnes and production value in excess of 10 billion yuan during the 12th Five-Year Plan period, according to the report.

Double Dragon, a comprehensive private company, focuses on business of coal, phosphorus chemical, food and trade, while Shanghai Yunfeng, a large state-owned company, mainly conducts business in energy, automobile, real estate and logistics.Coal-rich Guihzou holds coal reserves up to 50 billion tonnes, ranking the fifth in China.(By Xinhua)

Tags : coal, raw material, steel mills, coal production, agreement