China Baoli Tec (00164) has signed a memorandum of understanding with Pan-Asia Resources on the mining and production of coal mines to establish long-term strategic cooperation.

China Baoli Tec (00164) announced that on November 17, 2024, the company has entered into a memorandum of understanding with Panasia Resources Limited (Panasia) to establish a long-term strategic cooperation for the mining production of Panasia Coal Mine. The cooperation scope planned by both parties includes: the group will establish a ten-year business cooperation with Panasia, which can be renewed upon mutual agreement; the group will have the exclusive rights to mining, production, processing, transportation, and sales of coal (mining production) held by Panasia through its subsidiary in Mongolia. The goal is to gradually increase production to 2 million tons per year, with the ultimate goal of reaching 5 million tons per year after the completion of railway transportation; Panasia will assist in customs clearance, sales channel development, and customer acquisition; the group plans to build an exclusive pilot pithead coal-fired power plant in Mongolia; and the group aims to further utilize the cost efficiency of the pithead power plant to expand power generation to cryptocurrency mining and potential data center operations. Panasia will assist in obtaining all approvals from the Mongolian government and regulatory authorities in this regard. Panasia is a Hong Kong registered limited company. Through its subsidiary holding a 60% stake, Panasia owns an open-pit brown coal mine in southern Mongolia, with estimated total reserves of approximately 156 million tons, including 67 million tons of proven reserves and 89 million tons of inferred reserves. The group has extensive expertise in dry grinding and dry separation operations, providing cost-effective green solutions for exploration, ore beneficiation, grinding, and production of various ores. Dry grinding and dry separation technology not only improves the efficiency and productivity of mining and ore processing processes but also increases the total ore content. Through the company's technology, the goal is to increase the heating value of brown coal by 30%, while reducing sulfur content and moisture content, enhancing the overall product advantage. Business cooperation aims to fully leverage dry grinding and dry separation technology in mining, power generation, data center operations, and cryptocurrency mining, which require a significant amount of electricity due to their computational intensity. In the past, coal exported from Mongolia to China was mainly used for coking coal in the steel industry. With the slowdown in the Chinese real estate and infrastructure sectors, demand for coking coal is expected to decrease. The demand for brown coal is growing, mainly for power generation, heating, and an increasing application in the green energy sector as a coal-based hydrogen gas reducing agent. Panasia holds mining licenses and power generation licenses in Mongolia. The group believes that this business cooperation can fully utilize the competitive advantages of all parties, significantly reducing the production cost of mining production. The group will further develop its dry grinding and dry separation technology in the coal industry, and explore business opportunities in power generation, data centers, and potential cryptocurrency mining. It is expected that this move will drive further business growth, generate additional income, and enhance the group's profitability, bringing long-term benefits to the group and its shareholders.