HopgoodGanim Lawyers in Brisbane has advised Australian coal explorer and developer Northern Energy Corporation on a life of mine coal off-take agreement with Chinese steel making group Xinyang Iron and Steel Group Company Limited.
The agreement gives Xinyang Group access to 65 per cent of the off-take from the planned Colton mine, along with any additional developments at Maryborough.
This agreement will mean approximately $700 million for Northern Energy, in sales revenue, over a 10 year period (based on current coal prices and at the initial planned production rate).
HopgoodGanim also advised on the placement of more than 16 million Northern Energy shares to Xinyang Group in order to raise $23 million.
Lead partner Martin Klapper said the deal is a significant step forward for Northern Energy in terms of building a long term relationship with the Chinese steel industry and in developing its coking coal resources.
"China represents an increasingly important market for coal, and indeed for the entire resources sector in Queensland. We're seeing more and more of our clients entering into agreements with Chinese resources companies - it's proving to be an area of real growth," he said.