Hong Kong-listed Fushan International Energy Group Ltd has announced that it aims to acquire the 7.5% stake in Fulong Group held by Mr Wang Liping, the president of Fushan Energy. The move would help the company achieve its plan to purchase three coking coal mines owned by Fulong Group.
The three coking coal mines are Liulin Xingwu coal mining co, Liulin Jinjiazhuang coal mining co and Liulin Zhaiyadi coal mining co all located in Shanxi, China’s largest coal-producing province. The three mines have operated for 40 years, 12 years and 10 years respectively with current capacity of 1.2 million tonnes per year, 1.2 million tonnes per year and 2.1 million tonnes per year. As at the end of 2007, the total reserves of the three mines were estimated to be 205 million tonnes with proved reserve of 45.21 million tonnes.
Fushan Energy said that HKD 4.86 billion of the total HKD 10.5billion will be paid in cash by issuing new shares, bank financing and the company's internal capital, while the remaining HKD 5.67 billion will be paid by issuing 1.26 billion consideration shares at HKD 4.5 per share. It said that the fast growing domestic steel and coke industry would bring heavy demand for coking coal.
Source: Steel Guru
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