Shanxi Lu'an Environmental Energy Dev.Co., Ltd plans to set up a wholly owned subsidiary as the dedicated entity for its Shangma coal mine project.

The subsidiary, tentatively named Shanxi Lu'an Environmental Energy Shangma Coal Industry Co., Ltd., will have registered capital of 100 million yuan, the company said in a filing on September 10.

The move is aimed at coordinating permit procedures and construction work for the project.

In August 2024, Lu'an Environmental Energy won the coal exploration rights for the Shangma block in Xiangyuan county, Shanxi province, for 12.13 billion yuan. The exploration area covers 72.42 square kilometers with coal resources of 819.58 Mt.

The block has completed the transfer from exploration rights to mining rights and obtained a mining license and property ownership certificate for the mining rights, according to the filing. Registered capital may be adjusted later in line with regulatory requirements and project progress.

The new subsidiary's business scope will include coal washing, coal and coal product sales, general equipment repair, coal mining and road freight transport excluding dangerous goods.

Lu'an Environmental Energy said the subsidiary will serve as a professional implementation platform for the Shangma project, helping streamline project management and ensure efficient progress from early preparation to construction and operation, in line with the company's coal-focused strategy.

The company has been expanding resources in recent years to offset limited remaining mineable years at existing mines. The Shangma coal mine has a designed capacity of 5 Mtpa and, together with the Yaojiashan coal mine and Sucun block, forms the company's resource succession pipeline.

Lu'an Environmental Energy currently operates 18 producing mines with advanced capacity of 49.7 Mtpa and an average single-mine capacity of 3 Mtpa, according to its 2024 annual report. Mines under construction and planning have a combined capacity of about 8.5 Mtpa, with further output growth expected.