South Milwaukee-based Bucyrus International Inc. has entered into a preliminary framework agreement with Huainan Mining Industry (Group) Co., Ltd. to seek to establish a joint venture in the Huainan mining area of the Anhui Province in the People’s Republic of China. The preliminary agreement contemplates Bucyrus owning a controlling interest in a joint venture that would involve the building of a new state-of-the-art manufacturing facility in the Huainan mining area of China that would initially manufacture belt systems and armored face conveyors for resale on a preferential basis to Huainan Mining, as well as to other third parties in China and elsewhere.
It is possible that the joint venture could manufacture and sell additional underground mining equipment as well. Both Bucyrus and Huainan Mining would contribute an undisclosed amount of cash, as well as other assets and personnel, to the joint venture. Bucyrus president and chief executive officer Tim Sullivan said, "The joint venture which we hope will result from this preliminary framework agreement will benefit both Bucyrus and Huainan Mining. The first step in a resulting joint venture will extend our market coverage and provide us with a low cost manufacturing base in China. Huainan Mining will benefit from the higher technology of our products, and the region will gain through the development of a high technology manufacturing base in Anhui Province. There is also the future potential for exports using our international sales network."
