Atlantic Coal PLC Joint venture and coal sale agreement (9808S)
14 November 2013 - 6:00PM
UK Regulatory
TIDMATC
RNS Number : 9808S
Atlantic Coal PLC
14 November 2013
Atlantic Coal plc ("Atlantic Coal" or the "Company")
Joint venture and coal sale agreement
Atlantic Coal, the AIM listed anthracite coal mining company
operating in Pennsylvania, USA, is pleased to announce that it has
entered into a joint venture and coal sale agreement with China
based CIC Brancepeth Coal Limited ("CIC-Coal"), a company founded
and currently managed by AIM listed CIC Capital Ltd.
Joint venture agreement
Under the joint venture agreement Atlantic Coal will provide
coal mining and processing expertise to CIC-Coal and, in return,
CIC-Coal will purchase coal mined and/or processed by Atlantic
Coal.
The joint venture agreement runs for an initial three year
period following which it may be extended by mutual agreement.
Coal sale agreement
Under the coal sale agreement Atlantic Coal will sell a minimum
of 100,000 tonnes per year to CIC-Coal (with a minimum of 20,000
tonnes per quarter). The coal sale agreement provides a price per
tonne which is adjustable subject to market conditions. In
addition, there are certain specification provisions in relation to
the coal to be sold pursuant to the coal sale agreement.
Under the terms of the coal sale agreement Atlantic Coal is
responsible for all shipment costs up to the point of delivery to
CIC-Coal in Tianjin, China (including all duties, tariffs, taxes
and other charges that may be levied).
The coal sale agreement will commence no later than 31 March
2014 and will last for an initial period of three years following
which the agreement provides a mechanism for its extension.
Atlantic Coal's Managing Director, Steve Best, said: "I am
delighted to establish this relationship between Atlantic Coal and
CIC-Coal with these joint venture and coal sales agreements.
CIC-Coal and CIC Capital bring over 22 years of experience in the
Chinese coal market which will not only facilitate the marketing of
our premium anthracite to what is the world's largest user of
anthracite but also provide the essential local contacts to ensure
effective transport and distribution to end users primarily in the
iron and steel industry. 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. To
this end CIC-Coal and its subsidiary, Chinese coal group King
Harmony Limited, will purchase Atlantic Coal's anthracite in the
form of the off-take agreement. This in addition to the optimism we
shared on 4 November 2013 when we reported that market price levels
were now improving and we had commenced two full shifts working at
both the mine and the washing plant in anticipation of higher
demand as we go into the winter and so gives us further confidence
to continue the development of our assets.
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."
**ENDS**
For further information on the Company, visit:
www.atlanticcoal.com or contact:
Steve Best Atlantic Coal plc Tel: 0191 386 6392
Nick Naylor Allenby Capital Limited Tel: 020 3328 5656
Alex Price Allenby Capital Limited Tel: 020 3328 5656
Elisabeth Cowell St Brides Media & Finance Tel: 020 7236 1177
Ltd
This information is provided by RNS
The company news service from the London Stock Exchange
END
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