Saturday, May 24, 2008

Fushan to spend HK$10.53 bln on coking coal assets

HK-based Fushan International Energy Group Ltd announced on Thursday it would acquire a 7.5% stake in mainland coking coal miner Fulong Group for HK$10.53 billion (US$1.35 billion).

With the deal, Fushan will take over three coal mines of Fulong with an annual capacity of 1.2 million, 1.2 million and 2.1 million tons of coal respectively. The proved coal reserve of the three mines stood at 45.21 million tons, while the combined coal reserve available for exploration is expected to be 97.14 million tons.

HK$4.86 billion of the spending will be paid in cash and funds from banks, while the residual part will be settled through issuing 1.26 billion new shares at a price of HK$4.5 apiece, said the company, adding that coking coal is a kind of scarce resource which is on strong demand due to the fasting-growing domestic steel and coke industries.

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