Kiu Hung has entered into a memorandum of understanding to buy the exploration rights to the Xi Meng Coal mine in Inner Mongolia and the mining rights to the Huanghuashan coal mine in the same region.

The Xi Meng Coal mine is estimated to contain 300 million tonnes of reserves.

This is the toy maker’s second foray into the Chinese coal industry this year, having already acquired a coal mine in Inner Mongolia in an attempt to diversify its business and capitalise on increasing world demand for natural and energy resources.

In July the company also announced it had appointed three coal mining experts to the company to build up the business.

Ying Chengping was appointed chief engineer in coal geology and exploration and has 25 years experience.

Song Yuzhu was made director and chief engineer in mining operation, with 25 years of experience in coal mine design and operation backing him.

Fan Weikang was appointed chief engineer in pit exploitation. He has more than 41 years of experience in coal mine and pit exploitation.

“We believe the extensive experience of these three experts will definitely accelerate the speedy development of our coal and energy business, strengthen the execution capability for our coal business and contribute to our group's new business development," company chairman Joseph Hui said at the time.