Atlantic Coal, the AIM listed anthracite coal mining company, has entered into a joint venture and coal sale agreement with China based CIC Brancepeth Coal Limited (CIC-Coal), a company managed by CIC Capital Ltd.
Under the joint venture agreement, Atlantic Coal will provide mining and processing expertise to CIC-Coal and in return, CIC-Coal will purchase anthracite coal mined by Atlantic Coal in Pennsylvania, US.
The contract lasts for an initial three-year period, but can be extended thereafter by mutual agreement.
Coal sale agreement
Under the coal sale agreement, Atlantic Coal will sell a minimum of 100 000 tpa of coal to CIC-Coal (a minimum of 20 000 t per quarter). The agreement provides a price per t, which can be adjusted subject to market conditions.
Atlantic Coal is responsible for all shipment costs up to the point of delivery to CIC-Coal in Tianjin, China. The agreement will commence by 31 March 2014 and will also last for an initial three-year period, following which it can be extended.
Atlantic Coal’s managing director, Steve Best, commented: "I am delighted to establish this relationship between Atlantic Coal and CIC-Coal with these joint venture and coal sales agreements. CIC-Coal and CIC Capital bring over 22 years of experience in the Chinese coal market which will not only facilitate the marketing of our premium anthracite to what is the world's largest user of anthracite but also provide the essential local contacts to ensure effective transport and distribution to end users primarily in the iron and steel industry.
Chinese mining industry
“Our expansion plans in Pennsylvania are, in part, dependent on developing export markets and we see China as being one of the main targets with anthracite imports already having risen over 11% in the first five months of this year. To this end CIC-Coal and its subsidiary, Chinese coal group King Harmony Limited, will purchase Atlantic Coal's anthracite in the form of the off-take agreement.”
“While we currently have no immediate plans to enter the Chinese coal mining industry, the joint venture with CIC-Coal, with its interests in Chinese coal operations, also brings new opportunities to utilise our coal mining and processing expertise to develop new coal mining projects in China in the future", Best concluded.
Adapted from press release by Katie Woodward
Read the article online at: https://www.worldcoal.com/coal/14112013/china_to_import_atlantic_coal_258/