LONDON (Alliance News) - Atlantic Coal PLC Thursday said it has entered into a joint venture and coal sale agreement with China-based CIC Brancepeth Coal Ltd, a deal it hopes will help it develop its anthracite coal mine in Pennsylvania, while at the same time giving it opportunities in China.
Under the three-year deal, which may be extended if the parties agree, Atlantic Coal will provide coal mining and processing expertise to CIC-Coal and, in return, CIC-Coal will purchase coal mined and processed by Atlantic Coal.
CIC-Coal was founded and is currently managed by AIM listed CIC Capital Ltd.
Atlantic Coal will sell a minimum of 100,000 tonnes of coal a year, and 20,000 tonnes a quarter, to CIC-Coal, at an agreed price that can be adjusted depending on market conditions. Atlantic Coal is responsible for all shipment costs up to the point of delivery to CIC-Coal in Tianjin, China.
"Our expansion plans in Pennsylvania are, in part, dependent on developing export markets and we see China as being one of the main targets with anthracite imports already having risen over 11% in the first five months of this year," Atlantic Coal Managing Director Steve Best said in a statement.
"While we currently have no immediate plans to enter the Chinese coal mining industry, the joint venture with CIC-Coal, with its interests in Chinese coal operations, also brings new opportunities to utilise our coal mining and processing expertise to develop new coal mining projects in China in the future," Best added.
The news comes after Atlantic Coal gave a bullish statement earlier this month, reporting that coal prices are improving and it had increased shifts at its mine to try and meet expected higher winter demand.
Atlantic Coal shares were up 31.3% at 0.308 pence Thursday morning, the biggest riser on AIM. CIC Capital was up 2.2% at 5.75 pence.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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