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The UK-based company hopes that the deal will help it to develop its Stockton anthracite coal mine in the US state of Pennsylvania while also giving it opportunities in China.

As part of the three-year deal, Atlantic Coal will provide coal mining and processing expertise to CIC. In return, CIC and its Chinese subsidiary, coal group King Harmony, will purchase the coal mined and processed by Atlantic in an offtake agreement.

“Our expansion plans in Pennsylvania in part depend on developing export markets. We see China as one of the main targets, with anthracite imports already having risen by more than 11% in the first five months of this year,” Atlantic Coal md Steve Best said.

“While we 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 use our coal mining and processing expertise to develop new coal mining projects in China,” he added.

Atlantic Coal will sell a minimum of 100,000 tpy of coal and 20,000 tonnes a quarter to CIC Coal, at an agreed price that can be adjusted depending on market conditions.

Atlantic Coal will be responsible for all shipment costs up to the point of delivery to CIC Coal in Tianjin, China.

The coal sale agreement will start by March 31, 2014, at the latest. The joint venture agreement could be extended by mutual agreement.

Anthracite is the highest quality metallurgical coal. International demand for anthracite is at historically high levels, and it represents 1% of world coal reserves, according to Atlantic Coal’s website.