The move further increases supply of self-produced coal and exert vertical integrated coal supply chain advantage.
China Qinfa Group Limited (“Qinfa Group”), a leading private integrated coal operator in China, announced that it has completed the acquisition of 32% equity interest in Huameiao Energy Group (“Huameiao Energy”) through its wholly-owned subsidiary Guangfa Energy Investment Company Limited (“Guangfa Energy”). This move will enable the Group to strengthen its strategic position in sourcing quality coal in major coal production regions of China. Qinfa Group acquired Huameiao Energy for a consideration of RMB1.6 billion (equivalent to approximately HK$1.9 billion).
The consideration has fully been paid to the vendors. The Group financed RMB800 million (equivalent to approximately HK$958 million) of the consideration with bank loan and financed the remaining part of the consideration of RMB800 million from its own resources. The payment of this consideration by the Group does not affect the use of the net proceeds from the global offering of Qinfa Group’s shares on the main board of The Stock Exchange of Hong Kong Limited in July 2009.
In September 2009, Huameiao Energy was designated as a merging and reorganization entity with qualifications for the acquisition or integration of other smaller coal mines by the Shanxi Provincial Government. Huameiao Energy owns three coal mines, i.e. the Xingtao Coal Mine, Fengxi Coal Mine and Chongsheng Coal Mine in Shuozhou, Shanxi Province, with a total planned annual coal output capacity of not less than 8 million tonnes.
The Xingtao Coal Mine has a site area of approximately 4.3 sq. km. It was named a standardized coal mine by the People’s Government of Shuozhou, and has completed a technological modification at the end of 2010. The Fengxi Coal Mine has a site area of approximately 2.4 sq. km and commenced production in early 2011. It is undergoing technological modifications and constructing a wash plant which is expected to be completed by mid-2011The Chongsheng Coal Mine has a site area of approximately 2.9 sq. km. It is undergoing technological modifications and is scheduled to commence production by the end of 2011 with full production in 2013.
The main products of the three coal mines are long flame coal and gas coal that can be used for power generation and coke making.
Do you know more about this story? Contact us anonymously through this link.