According to a statement from Hebei Province-based Chinese miner Kailuan Group, the company is planning to cooperate with Hebei-based steelmaker Chengde Iron and Steel Group to establish a new joint venture called Chengde Zhongluan Coal Chemical Co.,Ltd, based on Chengde Iron and Steel Group's completed coking project phase 1 and its coking project phase 2 which is still under construction.
Kailuan Group will pay RMB 396.78 million ($59.67 million) cash to obtain a 51 percent stake in the new joint venture, while Chengde Iron and Steel will contribute assets and land used in its coking project phase 1 and phase 2, worth RMB 381.22 million ($57.3 million), for a 49 percent stake.
Chengde Iron and Steel's coking project phase 1 has an output capacity of 0.6 million mt per year, and the phase 2 project will start production at end of 2010, with a 1.1 million mt output capacity per year. The joint venture will construct a coking project phase 3 with output expected to be 2.1 million mt per year. When the 3 phases are completed, the overall coking project will have an annual output capacity of 3.8 milion mt.