Newton Resources Ltd. said March 16 that its Xingan League Newton Trading Co. Ltd. unit agreed to purchase at least 500,000 tonnes of coal from an unnamed Chinese coal company.
The company will pay about 50 million yuan as a deposit.
Based on expected market demands, the parties will enter into monthly purchase contracts setting out the quantity of coal to be purchased for the specified period. The price is expected to be determined by the average selling price of coal sold by Newton, subject to an agreed discount.
The off-take deal will take effect immediately and conclude on Dec. 31, but is renewable via mutual agreement.
The seller holds three mining permits covering about six square kilometers in Mongolia with an annual production capacity of 900,000 tonnes of coal.
As of March 15, US$1 was equivalent to 6.32 Chinese yuan.
