Under the deal, L&L will market Zheshang’s produced coal through its extensive customer network and oversee customer relationships, transportation and logistics.
Meanwhile, Zheshang will be responsible for mining production and mine safety.
The two are targeting annual sales of about 1.2 million short tons.
“L&L is pleased to work with Zheshang Coal Group again, building on previous successful partnership efforts,” L&L China operations vice president Walter Lin said, noting it would scale up sales in phases due to the large size of the agreed tonnage.
“With expected prices around $US115 or RMB714 per ton, the financial impact will be significant.
“L&L is continuing to build an extensive sales and distribution capability, and with this supply agreement we will meet customers demand beyond our own production capacity."
Zheshang, based in Guizhou, has 10 mines producing approximately 2Mtpa and it expanding its target production coal to 5Mtpa.
