For US-based pioneering coal junior Asia American Coal Incorporated there was really just one reason why it chose project finance as the means to fund its US285 million dollars Gaohe semi-anthracite coal deposit in China's Shanxi Province. Asian American -- which has been looking for opportunities in the east Asian country since the late 1990s -- is in the early stages of developing an ore body with a mineable reserve of 320 million tonnes and a geological one of 580 Mt. Located 500 kilometres south west of Beijing, it is envisaged the operation will produce 6-7 Mt of soft coal per annum that will target the domestic utility and pulverised coal injection markets. Gaohe is Asian American's second Chinese coal mine--the first being the smaller US 150 million dollars Daning anthracite play, which sits 100 km to the south west of Gaohe. The junior has planned to have a 6 Mt per annum plant established at the site by the end of July. To fund 45 percent of Daning, Asian American took out a loan through a Chinese bank. The remaining amount was provided by the company's three major shareholders (54 percent) and other stock investors (1 percent).
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