SouthGobi Resources said that it has signed a contract to sell 3.2 million tonnes of coal to Winsway Coking Coal in 2011. The two companies have also signed a strategic alliance agreement whereby SouthGobi has committed to sell at least two million tonnes of coal to Winsway annually.

Under the five-year agreement, Winsway will also provide SouthGobi with priority access to its logistics assets. SouthGobi said that it intends to deliver 800,000 tonnes of coal to Winsway in each quarter of 2011. Pricing for the coal to be sold under this contract has been agreed to for the first quarter of 2011, and will be determined by mutual agreement in advance of each subsequent quarter.

The company, which produces coal from its Ovoot Tolgoi mine in Southern Mongolia, did not disclose pricing terms related to the contract. SouthGobi began mining coal in 2008, and sold 1.3 million tones of coal in 2009.

(Sourced from Reuters)