CHINA QINFA (HKEX: 00866) has announced that its non-wholly owned subsidiary, SDE, has entered into a coal supply agreement with Zhejiang Energy Asia Pacific. The agreement pertains to the sale of coal by SDE to Zhejiang Energy Asia Pacific.

SDE has agreed to sell, and Zhejiang Energy Asia Pacific has agreed to purchase, 75,000 metric tons of Indonesian fuel coal (base quantity). According to the terms of the supply agreement, the contracting parties may mutually agree to adjust this base quantity upwards or downwards by 10%.

It was initially anticipated that Zhejiang Energy would enter into a 20-year coal supply agreement with SDE. However, the parties require more time to assess their annual production capacity before committing to a long-term arrangement. Consequently, the parties have decided to proceed with a supply agreement for a shorter duration at this stage.

By executing this coal supply agreement, the group is set to secure a stable revenue stream, underpinned by the consistent demand from the state-owned power plants operated by Zhejiang Energy's controlling shareholder.