Yanzhou Coal Mining Co. Ltd. (YZC)

News and Research on Yanzhou Coal Mining Co. Ltd. (YZC)

Business Description

Yanzhou Coal Mining Company Limited engages in the underground mining, preparation and sale of coal, and railway coal transportation. The company’s subsidiaries engage in trading and processing of mining machinery and the transportation business.

The company operates six coal mines, namely the Xinglongzhuang coal mine, Baodian coal mine, Nantun coal mine, Dongtan coal mine, Jining II coal mine (Jining II) and Jining III coal mine (Jining III) as well as a regional railway network that links these mines with the national railway gird.

Products

The company’s products are mainly prime quality low sulphur coal, which is suitable for use in power plants as steam coal, metallurgical production as coal to be used with coking coal and the process of pulverized coal injection (PCI). Its coal products are exported to East Asian countries, such as Japan and South Korea.

Acquisitions

In January 2007, the company acquired Yanzhou Coal Shanxi Nenghua Company Limited (Shanxi Nenghua).

Shanxi Nenghua holds 81.31% equity interest in Shanxi Heshun Tianchi Energy Company Limited (Tianchi Company), which is mainly responsible for the production and operation of Tianchi Coalmine. Shanxi Nenghua holds 99.85% equity interest in Shanxi Tianhao Chemicals Company Limited (Tianhao Company), which mainly undertakes the construction and operation of a 100,000 tonnes methanol project. The methanol project is under the construction.

Customers

The company’s primary customers include electric power plants, metallurgical companies, construction material producers and railway companies. The company has established relationships with these companies. It also sells its coal to provincial and city fuel trading companies. Its major domestic customer includes the Huadian Power International Corporation Limited (Huadian). The customers of the company are mainly located in countries or regions in East Asia such as Japan, Korea, Eastern China and Southern China.

The company’s export sales is made through China National Coal Industry Import and Export Corporation (National Coal Corporation), Minmetals Trading Co., Ltd. (Minmetals Trading) or Shanxi Coal Imp. & Exp. Group Corp. (Shanxi Coal Corporation).

Competition

The company’s major competitor includes Yankuang Group Corporation Limited.

History

Yanzhou Coal Mining Company Limited was founded in 1973.