L & L Energy, Inc., a Seattle, US-based coal producer operating businesses in China, announced on June 14 that it has entered into a memorandum of understanding (MOU) with Shunda Mining Company (Shunda) to continue discussions for the acquisition of this company. Shunda has two coal mines with total existing mining production of 750,000 mt per year and a coal washing facility with total existing annual production of 900,000 mt per year.
In its statement, L & L Energy said that the acquisition, which is expected to be completed in 2010, will enable L & L to better serve the growing demand for coal and energy supply in China.
Under the terms of the MOU, L & L intends to acquire at least a 51 percent equity stake in Shunda and will invest an undisclosed amount in Shunda's operations, in the construction of a 1 million mt capacity new coking facility recently initiated and to increase the output of the coal washing facility. L & L is currently performing due diligence regarding the acquisition.