The mine currently produces about 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.
Pursuant to the agreement, L&L and the current owner of the mine will form a US joint venture company in China.
L&L will contribute approximately $18m in exchange for management control and 60% equity of the new JV on a net equity basis.
An additional $3m in capital expenditures is planned to be injected by L&L for the improvement of safety and operational efficiency of the mine.
L&L chairman and CEO Dickson Lee said that by acquiring a majority stake in the DaPing mine, the company will be better positioned to meet the rising coal demand in China and more specifically in Guizhou province.
