According to The Economic Observer, Yankuang signed a letter of intent with Mitsui to form a joint venture to develop two mines in the Juye coalfield. Yankuang will own the controlling stake, while Mitsui's stake will not exceed 20%.
Yankuang Group, the parent of Hong Kong-listed Yanzhou Coal Mining, expects to pay $HK2.83 billion to buy the stake, significantly increasing the company's coal reserves.
Coal reserves at the two mines are reported to be between 800 million and 1.5 billion tons with annual production output expected to reach 4.8Mt.
Yanzhou Coal has an eight million tons per annum mine coming on-stream in Shaanxi province and a 6Mtpa mine in Shandong to go into production in 2007. The company’s newly purchased Australian-based Austar coal mine could produce up to 3Mtpa from next year.
