Under a fixed fee of $1m for five years the agreement allows TNI to operate ZoneLin’s 150,000-ton annual coking facility, provide the necessary working capital, and collect revenue of the facility.
Additionally, TNI is the exclusive provider of advisory and consultancy services to ZoneLin. The coking revenue, profit, or loss will be consolidated in L&L financial statements as a variable interest entity.
L&L expects the agreement to generate approximately $28m revenue per year, based on a $187 price per ton of coke. The agreement covers a period of five years starting from November 1, 2009, and can be extended by mutual consent.
Dickson Lee, CEO of L&L, said: “We’re confident that contracting of ZoneLin will increase our revenue and profits. This new development also extends L&L role of becoming a leader in the region.”
