Oct 13 2008
Vimetco N.V. , the global producer of primary and processed aluminium products, today announces the acquisition of the Yaoling Coalmine in Gongyi, Henan Province, China, through its subsidiary company Henan Yulian for a consideration of RMB 213 million.
The purchase has been completed through a joint venture with Yongcheng Coal & Electricity Co., the current mine operator, and the Gongyi city government. The partnership has acquired a 65% stake in the asset with the remaining 35% owned by current employees of the mine. Of the partnership holding, both Henan Yulian and Yongcheng have a 45% share, with the remaining 10% held by the Gongyi city government.
The acquisition of the Yaoling mine ensures mining rights for 33 years until 2041. The mine, which has 900 employees, covers an area of 10.56km2 and has workable reserves of 27 million tonnes. Total production for 2007 was 580,000 tonnes and as a result of the acquisition, Henan Yulian expects to receive 600,000 tonnes of coal per year, at market prices.
Vimetco’s acquisition of the coal mine fully complements the company’s existing assets at Gongyi and will strengthen the integrated power generation for the two smelting plants. The coal mine also provides the potential to support further production capacity expansion.
The purchase is in line with the company’s goal of achieving full self-sufficiency in power for all its aluminium production operations. This is another key step towards achieving Vimetco’s overall strategy to become a fully integrated producer.
Christian Wüst, Chief Executive Officer, commented:
“We are delighted to have completed the acquisition of the coal mine in Gongyi, a region where we are also expanding our smelting, cast house and processing capacities. The purchase is particularly beneficial in ensuring the sustainability of power supply for our aluminium operations.
The ability to provide integrated power generation through the ownership of coal assets is an integral factor in Vimetco’s development and reinforces our position as a top three aluminium producer in China.”