L&L Energy will initially pay an earnest deposit of CNY2.2m ($349,000) for LuoZhou. The balance will be paid under other consideration, including payment-in-kind of non-strategically held interests, stock and/or cash once the terms are finalized.
The coal mine is currently in trial production and is expected to reach its approved annual rate of 150,000 tons by the final quarter of 2012.
LuoZhou mine, with an estimated reserves of 27 million tons, is targeted for expansion to 450,000 tons.
The American company had previously acquired the Weishe Mine from Union Energy and signed an MOU to take up controlling stake in LaShu Mine.
L&L director Syd Peng said the company is implementing its consolidation strategy in HeZhang County with Union Energy.
"We aim to repeat the successes of Weishe, being designated as a model mine by local authorities, at other operations," Peng said.
"LuoZhou and LaShu will upgrade our existing mining portfolio, increase our total accessible reserves, and provide added coal to expand our wholesale operation, driving profits and growth."
All the three mines located in the HeZhang County, are expected to produce more than one million tons of low sulfur, high BTU, anthracite coal each year.
