(EnergyAsia, April 9 2012, Monday) — Seattle, US-based L&L Energy said it has signed a long-term agreement to supply coal to a thermal coal-fired power plant in Guizhou province owned by Datang International Power Generation (Datang Utility).
L&L said its DaXing subsidiary will provide 20,000 tons of thermal coal per month over 12 months to the HeShan power plant.
At an average sales price of US$130 per ton, the contract is expected to generate approximately US$31 million in revenues for the company.
As one of China’s largest power generation groups with more than 100 subsidiaries in over 18 provinces, Datang Utility had an operating revenue of approximately US$11.5 billion dollars in 2011.
L&L chairman and CEO Dickson Lee described the contract as “the first step in expanding our coal network beyond Yunnan and Guizhou to other provinces. We will work with our new strategic partner, AVIC International, to seek additional wholesale opportunities in Guangxi as well as other neighbouring provinces.
“(Datang Utility) is a well-known, reputable organization with a wide-reaching network, and this contract aligns with our efforts to build business relationships with large institutions.”
Last month, L & L Energy Inc announced that it had signed a strategic sales agreement with AVIC International Coal Logistics Co Ltd to sell and distribute coal in Guizhou. AVIC Logistics, a Guizhou company, is building a coal trading and logistic system to serve the industry in Guizhou.
As part of their agreement, L&L will utilise AVIC Logistics’ platform, wholesale and railroad networks to jointly market one million to two million tons of coal this year. At US$ 150 per ton coal price, the agreement could generate an annual revenue of over US$ 150 million.