The agreement permits L&L to access the resources of GSY, which has 26 mines with 7.5 million tons of annual production capacity, and help with securing additional GSY coal.

GSY, which has a wholesale network with 1.6 Mtpa as well as coal equipment and machinery retail outlets, will in turn leverage L&L’s ties to large Chinese utility Datang International.

The companies will work together to develop a coal washing, blending, and wholesale facility at a 33-acre GSY site near the ZhaZuo Railway Station, which offers rail access in the Guizhou Province.

GSY’s loading facility neighbors L&L’s ShinPingBa loading station and the rail terminal will serve to increase L&L’s capabilities for large-scale customers

“By leveraging on GSY's vast mining assets, we have demonstrated our innovative ability to expand business effectively with less capital investment,” L&L chairman and chief executive Dickson Lee said.

“Moving forward, we plan to develop a joint venture with GSY to accelerate our revenue and profit growth.”

Last month, L&L announced plans to explore business opportunities and grow its sales in China with the logistical and financial help of Chengdu City firm AVIC Sichuan Coal Logistics.

Under a deal between the two, AVIC Sichuan will share its customer base and logistics network as well as market intelligence with L&L. The producer will, in turn, have access to the Chinese company’s financial capabilities.

The pair’s initial area of focus will be Chongqing City and Chengdu City, both massive markets with populations of 28 million and 14 million, respectively.

AVIC Sichuan, a division of the massive AVIC International Holding, possesses a strong coal network in Chongqing City, with assets of more than $US15.7 billion (RMB100 billion).