20-F/A

As filed with Securities and Exchange Commission on October 9, 2013

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F/A

(Amendment No. 1)

¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

¨ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

Commission file number: 001-14714

(Exact name of Registrant as specified in its charter)

Yanzhou Coal Mining Company Limited

(Translation of Registrant’s name into English)

People’s Republic of China

(Jurisdiction of incorporation or organization)

298 Fushan South Road

Zoucheng, Shandong Province

People’s Republic of China

(Address of principal executive offices)

Zhang Baocai

298 South Fushan Road

Zoucheng, Shandong Province

People’s Republic of China (273500)

Tel: (86)537 5382319

Fax: (86)537 5383311

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class	Name of each exchange on which registered
American Depositary Shares	New York Stock Exchange
Class H Ordinary Shares	New York Stock Exchange*

* Not for trading in the United States, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

(Title of class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title of class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

2,960,000,000 Domestic Shares, par value RMB1.00 per share

1,958,400,000 H Shares, par value RMB1.00 per share, including H Shares that were represented by 12,915,380 ADSs

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.)    Yes  ¨    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x Accelerated filer  ¨ Non-accelerated filer  ¨

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP  ¨ International Financial Reporting Standards as issued by the International Accounting Standards Board  x Other  ¨

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.    Item 17  ¨    Item 18  ¨

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Explanatory Note

This Amendment No.1 to the Annual Report on Form 20-F for the year ended December 31, 2012, as filed with the U.S. Securities and Exchange Commission (the “Commission”) on April 29, 2013 (the “Original Form 20-F”), is being filed solely for the purpose of amending “Item 4. — B. Business Overview”, “Item 4. — D. Property, Plant and Equipment”, “Item 5. — A. Operating Results”, “Item 5. — F. Tabular Disclosure of Contractual Obligations”, “Item 19. Exhibits”, “Consolidated Financial Statements — Notes 4. Significant Accounting Policies” and “Consolidated Financial Statements — Notes 5. Accounting Judgements and Key Sources of Estimation Uncertainty” in the Original Form 20-F. The Registrant has been requested by the Commission to supplement details of its trading coal business, revise its disclosure with respect to the advanced-exploration stage projects , revise its breakdown of contractual obligations and supplement its exhibits filed with the Original Form 20-F.

Other than what is set forth above, this Amendment No. 1 makes no changes to the financial statements of the Registrant and does not, and does not purport to, amend, update or restate any other information in the Original Form 20-F, or reflect any events that have occurred after the Original Form 20-F was filed on April 29, 2013.

B. Business Overview

We are one of the primary coal producers in China and Australia, with rapidly growing coal mining operations. We primarily engage in the mining, washing, processing and distribution of coal through railway transportation. We offer a wide variety of coal products including thermal coal, semi-hard coking coal, semi-soft coking coal, PCI coal and other mixed coal products which are sold to power plants, metallurgical mills, chemical manufacturers, construction material manufacturers and fuel trading companies in China and other countries, including Japan and South Korea. Since 2004, we have expanded our operations to include the production of coal chemicals and the generation of electricity and heat. We also commenced our potash exploration business in 2011.

As of December 31, 2012, we were 52.86% owned by our parent, the Yankuang Group, which is wholly owned by the Shandong Provincial Government under the control of the SASAC of the Shandong Provincial Government. The Yankuang Group was founded in 1973 to focus on coal mining and sales, the coal chemical industry, power generation, aluminum production, machinery manufacturing and financial investments. We were established in 1997 and listed on the SSE, HKSE and NYSE in 1998. In addition, our subsidiary, Yancoal Australia, was listed on the ASCX in 2012. Our revenue increased from RMB33,944.3 million in 2010 to RMB47,065.8 million in 2011 and further to RMB58,146.2 million in 2012, representing a CAGR of 30.9%.

As of December 31, 2012, we owned and operated 21 coal mines across regions with abundant coal resources, including Shandong and Shanxi Provinces and the Inner Mongolia Autonomous Region in China, as well as Queensland, New South Wales and Western Australia in Australia. In addition, as of December 31, 2012, we had nine advanced-exploration stage projects in China and Australia and a number of exploration tenements in Australia that might be potentially developed. Our exploration activities and reserve assessments are continuing on these properties and no reserves have been demonstrated to date.

We directly own and operate six coal mines in the PRC, namely, Nantun, Xinglongzhuang, Baodian, Dongtan, Jining II and Jining III, which produced in the aggregate approximately 48.8% of our total coal output in 2012. As of December 31, 2012, these six mines had approximately 1,729.43 million tonnes of in-place proven and probable reserves. In addition, we directly own and operate Beisu and Yangcun Coal Mines. We also hold equity interests in a number of coal mines in China through our subsidiaries. Shanxi Nenghua operates Tianchi Coal Mine, which holds approximately 25.7 million tonnes of recoverable reserves; Heze Nenghua operates Zhaolou Coal Mine, which holds approximately 102.2 million tonnes of recoverable reserves; and Ordos Neng Hua operates Anyuan Coal Mine and Wenyu Coal Mine. In addition, we had four projects under development in China as of December 31, 2012.

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The map below shows the approximate locations of our coal mines and project in China.

We conduct our operations in Australia primarily through our subsidiaries, Yancoal Australia and Yancoal International (Holding). Yancoal Australia currently operates six coal mines in Australia including Austar, Yarrabee, Ashton, Moolarben, Gloucester and Donaldson which collectively held approximately 703.7 million tonnes of JORC-compliant reserves as of December 31, 2012. In addition, Yancoal Australia owns approximately 50% of the equity interest in the joint venture that owns and operates Middlemount Coal Mine, which held approximately 96.0 million tonnes of JORC-compliant reserves as of December 31, 2012. Yancoal Australia also holds an advanced-exploration stage project, Monash. Yancoal International (Holding) currently owns Cameby Downs and Premier Coal Mines, which collectively held approximately 590.2 million tonnes of JORC-compliant reserves as of December 31, 2012, as well as the advanced-exploration stage projects Athena, Harrybrandt, Wilpeena and Wilga. In addition, we had a number of exploration tenements in Australia with potential for developments as of December 31, 2012.

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The map below shows the approximate locations of our coal mines and projects in Australia.

Coal Business

We are primarily engaged in the production of coal, which involves the mining, washing, processing and distribution of coal. Historically, our coal operations were primarily based in the PRC, but we began our operations in Australia in 2004 after we acquired the Austar Coal Mine, and have rapidly expanded our Australian coal operations since the fourth quarter of 2009 when we acquired Felix and in June 2012 when we completed the merger with Gloucester. Our products consist primarily of thermal coal, semi-soft coking coal, semi-hard coking coal, PCI coal and other mixed coal products which are suitable for power generation and metallurgical production. The following table sets forth the specifications and principal applications of our coal products.

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	Sulfur Content	Range of and Average Ash Content	Calorific Value	Washed	Principal Applications
	%	%	(megajoule/ kilogram)
The Company
No. 1 clean coal	0.43	7-8 average 7.75	26-28 average 28	Yes	High quality metallurgical production
No. 2 clean coal	0.53	8-9 average 8.36	26-28 average 27.94	Yes	Metallurgical production, construction, liquid coal production
No. 3 clean coal	0.57	10-11 average 10.32	26.3-26.9 average 26.79	Yes	Electricity generation and coal chemical production
Lump coal	0.51	9-14 average 10.83	25-28 average 27.44	Yes	Construction, power generation, coal for oven application
Mixed coal	0.90	22-30 average 27.93	18-22 average 20.37	Yes	Power generation
Shanxi Nenghua
Screened raw coal	1.07	27-35, average 33.91	19-23, average 19.93	No	Power generation
Lump coal	0.77	9-11, average 9.09	30-32, average 30.72		Power generation, construction
Heze Nenghua
No. 2 clean coal	0.71	8-9, average 8.41	average 29.73	Yes	Metallurgical production, construction
Mixed coal	1.2	average 31.87	average 19.07	Yes	Power generation
Ordos Nenghua
Screened raw coal	<0.63	7.85-14.00, average 13.50	20.90-21.33, average 22.0	No	Power generation
Yancoal Australia
Semi-hard coking coal	1.30	5.0	average 33.18	Yes	Metallurgical production
Semi-soft coking coal	0.65	9.5	average 29.82	Yes	Metallurgical production, construction
PCI coal	0.7	9.5-10.5	average 30.66	Yes	Metallurgical production
Thermal coal	0.5-0.6	13.5-17.0	27.30-27.93	No	Power generation

The following table sets forth our principal coal products by sales volume and sales income of coal for the periods indicated. For the purposes of the table below, the figures of sales income and sales volume include inter-segment sales.

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	Year Ended December 31,
	2010				2011				2012
	Sales volume (‘000 tonnes)		Sales income(1) (RMB in millions)		Sales volume (‘000 tonnes)		Sales income(1) (RMB in millions)		Sales volume (‘000 tonnes)		Sales income(1) (RMB in millions)
The Company		33,657		21,324.8		33,276		22,827.6		33,943		20,789.4
No. 1 clean coal		691		677.2		534		587.9		385		353.0
No. 2 clean coal		9,002		8,771.2		8,950		9,373.4		9,042		8,039.5
No. 3 clean coal		1,560		1,293.7		2,222		1,969.3		2,540		1,829.1
Lump coal		1,297		1,206		1,786		1,845.5		1,245		1,112.9
Screened raw coal		16,726		8,085.5		13,495		6,714.0		14,190		7,195.4
Mixed coal and others		4,381		1,290.7		6,289		2,337.5		6,541		2,259.5
Shanxi Nenghua		1,498		572.3		1,223		572.1		1,343		469.5
Screened raw coal		1,498		572.3		1,223		572.1		1,343		469.5
Heze Nenghua		1,079		833.0		2,004		1,829.2		2,292		1,662.5
No. 2 clean coal		546		603.2		1,211		1,471.0		1,183		1,234.4
Screened raw coal		119		62.6		37		19.7		—		—
Mixed coal and others		414		167.2		756		338.4		1,109		428.1
Ordos Neng Hua		—		—		4,379		1,273.0		6,834		1,621.7
Screened raw coal		—		—		4,379		1,273.0		6,834		1,621.7
Yancoal Australia		8,022		6,210.2		10,060		9,353.4		14,350		9,296.0
Semi-hard coking coal		1,146		1,043.3		914		1,023.2		506		377.4
Semi-soft coking coal		1,279		1,202.3		1,049		1,319.6		1,124		1,048.1
PCI coal		2,046		1,893.8		2,333		2,988.9		2,056		1,917.6
Thermal coal		3,551		2,070.8		5,764		4,021.7		10,663		5,952.9
Yancoal International (Holding)		—		—		—		—		2,965		994.3
Thermal coal		—		—		—		—		2,965		994.3
Externally purchased coal		5,378		3,990.0		13,308		9,613.2		32,421		21,586.5
Total		49,634		32,930.3		64,250		45,468.5		94,148		56,419.9

(1) Sales income comprises the invoiced amount of coal sold net of returns and discounts.

Sales and Marketing

A significant portion of our PRC domestic sales is made on the spot market or pursuant to strategic framework agreements, while the remainder of our coal sales are made pursuant to sales contracts generally for a term not exceeding one year. These strategic framework agreements generally specify the quantity of the coal to be purchased. Prices for strategic framework agreements are generally determined in the annual sales contracts or monthly sales contracts which we enter under the strategic framework agreements.

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We sell the majority of our domestic coal products to power plants, metallurgical mills, coking manufacturers, chemical manufacturers and construction material manufacturers with whom we have established long-standing and stable relationships. The majority of the coal sales of our Australian subsidiary, Yancoal Australia, are to power plants and metallurgical mills. The following table sets forth a breakdown of our sales income, which represents the invoiced amount of products sold net of returns and discounts of coal by the industry of our customers for the periods indicated. For the purposes of the table below, the figures of sales income include inter-segment sales.

	Year Ended December 31,
	2010				2011				2012
	Sales income(1)		% of Sales income		Sales income(1)		% of Sales income		Sales income(1)		% of Sales income
	(RMB in millions)				(RMB in millions)				(RMB in millions)
Power plants		7,493.8		22.8		8,875.0		19.5		8,230.0		14.6
Metallurgical mills		5,200.2		15.8		6,445.7		14.2		4,902.7		8.7
Chemical manufacturers		1,405.3		4.3		1,740.6		3.8		6,830.0		12.1
Others(2)		18,831.0		57.2		28,407.2		62.5		36,457.2		64.6
Total		32,930.3		100.0		45,468.5		100.0		56,419.8		100.0

(1) Sales income comprises the invoiced amount of coal sold net of returns and discounts.

(2) Others comprises industries such as coking and construction material manufacturing.

The following table sets forth a breakdown of sales income of coal by geographical region for the periods indicated. For the purposes of the table below, the figures of sales income include inter-segment sales.

	Year Ended December 31,
	2010				2011				2012
	Sales income(1)		% of sales income		Sales income(1)		% of sales income		Sales income(1)		% of sales income
	(RMB in millions)				(RMB in millions)				(RMB in millions)
China		27,619.7		83.9		36,703.8		80.7		46,792.6		82.9	%
Eastern China		21,861.5		66.4		28,464.1		62.6		42,835.4		75.9	%
Southern China		511.9		1.6		2,449.6		5.4		76.1		0.1	%
Northern China		251.1		0.8		211.4		0.5		2,957.6		5.3	%
Other regions		4,995.2		15.2		5,578.8		12.3		923.5		1.6	%
Japan		2,349.0		7.1		4,030.3		8.9		1,777.9		3.2	%
South Korea		1,920.0		5.8		1,972.4		4.3		2,394.2		4.2	%
Australia		482.2		1.5		271.0		0.6		2,297.6		4.1	%
Others		559.3		1.7		2,490.9		5.5		3,157.6		5.6	%
Total		32,930.3		100.0		45,468.5		100.0		56,419.8		100.0

(1) Sales income comprises the invoiced amount of coal sold net of returns and discounts.

Our domestic coal sales are concentrated primarily in eastern China, particularly in Shandong and, to a lesser extent, in northern China. Our sales income, which represents the invoiced amount of products sold net of returns and discounts, generated from eastern China as a percentage of total sales income was 66.4%, 62.6% and 75.9% in 2010, 2011 and 2012, respectively. The majority of our sales income is in the PRC. In 2010, 2011 and 2012, we generated 83.9%, 80.7% and 82.9%, respectively, of our sales income from the PRC.

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The following table sets forth a breakdown of export sales of our Company and Yancoal Australia for the periods indicated.

	Year Ended December 31,
	2010				2011				2012
	Sales income(1)		% of sales income		Sales income(1)		% of sales income		Sales income(1)		% of sales  income
	(RMB in millions)				(RMB in millions)				(RMB in millions)
The Company
Japan		9.7		0.2		14.3		0.2		7.4		0.1
Our Australian subsidiaries
South Korea		2,349.0		38.5		4,030.3		44.2		2,394.2		29.9
Japan		1,910.3		31.3		1,958.1		21.5		1,770.5		22.1
China		909.4		14.9		603.0		6.6		670.4		8.4
Others		926.4		15.2		2,506.7		27.5		3,157.6		39.5
Total		6,104.8		100.0		9,112.4		100.0		8,000.1		100.0

(1) Sales income comprises the invoiced amount of coal sold net of returns and discounts.

Export sales, excluding the coal sales in Australia by our Australian subsidiaries, represent only a small percentage of our total coal sales income. In 2010, 2011 and 2012, we generated 18.5%, 20.0% and 14.2%, respectively, of our sales income from export sales. Our major overseas markets include South Korea and Japan. The majority of our overseas customers are located in Asia, and South Korea is our biggest market in this region. Even though we conduct all of our export sales from the PRC through export agents, we maintain close relationships with our overseas customers.

In 2010, 2011 and 2012, our Australian subsidiaries’ domestic sales income was 1.9%, 2.7% and 22.3%, respectively, of their total sales income and in these same years their export sales income was 98.1%, 97.3% and 77.7%, respectively, of its total sales income. Our Australian subsidiaries’ export sales income represented 99.8%, 99.8% and 99.9% of our total export sales income in 2010, 2011 and 2012, respectively. Our Australian subsidiaries primarily conduct their export sales directly by entering into agreements with end user customers. Our Australian subsidiaries also export a small portion of coal through export agents with which our Australian subsidiaries have established longstanding relationships. The primary destinations for the export sales of our Australian subsidiaries are South Korea, Japan and China.

To meet our customers’ demand beyond the current capacity of our domestic coal mines, and to maintain and expand our customer base to support our anticipated capacity expansion by our advanced-exploration stage coal mines, we also purchase coal from other coal mining companies and trading companies and sell it to power plants, metallurgical mills and construction material manufacturers with whom we have established stable relationships. Purchases and sales of externally purchased coal are made pursuant to sales contracts. These sales contracts generally specify major terms such as the type of the coal, quantity and quality of the coal, price, delivery and payment methods. Prices for such contracts are generally determined in accordance with the market price.

Customers

As of December 31, 2012, our major customers include Huadian International, Yongcheng Coal and Electricity Holding Group Shanghai Co., Ltd., Noble Resources Limited, Linyi Yehua Coking Co., Ltd. and Baoshan Iron & Steel Co., Ltd., among which Huadian International was our largest customer. In 2010, 2011 and 2012, sales to our top five largest customers accounted for 24.7%, 19.4% and 19.4% of our sales income, respectively. In 2010, 2011 and 2012, sales to our largest customer, Huadian International, accounted for 13.0%, 8.5% and 6.3%, respectively, of our sales income. A substantial portion of Huadian International’s coal purchases was, in turn, supplied to Zouxian Power Plant.

Leveraging the high quality of our products and the strength of our brand, we have established long-term relationships with our customers. We make significant efforts to establish and maintain long-term cooperative relationships with our customers, and in particular, with our key customers. We have annual evaluations of our customers to identify key customers. To maintain the relationships with our key customers, we generally provide favorable price terms and product delivery priority. Our sales and marketing department conducts routine customer visits and customer surveys to keep abreast of market developments, collect and evaluate customers’ responses, maintain customer relationships and continually improve our business. In addition, we closely monitor the market information about eastern China, South Korea, Japan and other regions, which we use for business planning and execution.

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We have a flexible credit policy, and the credit terms we grant to our customers may vary from customer to customer depending on each customer’s creditworthiness, historical relationship with the Company and the credit amount involved. We may allow open accounts, require acceptance bills or require cash on delivery. We rely on data from our enterprise resource planning system to determine the appropriate payment arrangement and credit terms for each customer, which generally do not exceed 180 days. We evaluate the creditworthiness of potential new customers before entering into a sales contract with them and reassess the creditworthiness of all of our customers on an annual basis. For customers without a strong credit history, we require them to settle their accounts upon delivery.

Pricing

The pricing for our coal products sold in the PRC is generally based on negotiations between the contracting parties that reflect market conditions. However, a portion of our thermal coal sales may be affected by pricing guidelines announced by the PRC government from time to time or subject to temporary price controls. For example, the State Council and the NDRC adopted measures to control the prices of thermal coal in 2010 and 2011, pursuant to which prices of thermal coal supplied to power generating enterprises in 2012 may not increase by more than 5% from 2011 prices, and the spot prices of thermal coal (5,500 kcal/kg) received at major domestic ports must be less than RMB800 per tonne. In December 2012, the General Office of the State Council issued a guideline to further implement the market reform for thermal coal. Pursuant to the guideline, beginning in 2013, the PRC government will discontinue the compulsory thermal coal supply contracts arrangement, which required coal producers to sell thermal coal to power generation enterprises at preferential prices set by the government. In addition, prices of thermal coal will be negotiated between power generation enterprises and coal producers, instead of pursuant to government-guided prices. See “— Regulatory Oversight of Our Group.” For our Australian operations, the pricing of our coal products is dependent on negotiations between the contracting parties, as well as prevailing market prices. There are no price control schemes in Australia. In both our PRC and Australian markets, to price our coal products, we consider the prevailing prices in the relevant local coal markets, the grade and quality of the coal and our relationship with the purchaser. Our sales and marketing department monitors domestic and international market information, enabling us to keep abreast of pricing developments in our principal markets.

Transportation

Most of our major coal customers are located in eastern China and our remaining domestic customers are located in southern and northern China. We deliver coal to our customers primarily by railways and highways. We also deliver our coal by domestic and international shipping lanes. With our private railway network, we are able to connect to the national railway system or deliver coal directly to Zouxian Power Plant.

We also ship coal on the national railway system to ports, such as Rizhao, Qingdao and Lianyungang, for delivery to customers. Rizhao Port is our main port for shipping coal. We also use the Beijing-Hangzhou Grand Canal to ship coal on barges to customers located in the area serviced by the canal, primarily Jiangsu and Zhejiang. In Shanxi, we rely on the Yangshe Railway, which intersects the Tianchi Coal Mine, and trucks to deliver coal to Hebei, Shandong and other nearby areas. We rely on the Baoshen Railway and trucks to deliver coal from Anyuan Coal Mine and Wenyu Coal Mine to Hebei and the surrounding areas.

We plan to construct a privately operated railway to connect Zhaolou Coal Mine with the national railway system. Before completing the construction, we will continue to rely on trucks to deliver coal from Zhaolou Coal Mine to the national railway and customers.

We transport Yancoal Australia’s coal products to Newcastle Port and Gladstone Port in Australia at our cost using third parties’ railway networks. These coal products are then exported to South Korea, Japan and other destinations by sea. Yancoal Australia owns a 27.0% interest in NCIG, a joint venture responsible for constructing and operating the third export terminal at Newcastle Port, and will have an annual port capacity of 14.6 million tonnes through NCIG’s facility when it reaches its full design capacity of 66.0 million tonnes per annum. Yancoal Australia also had an annual port capacity of 11.0 million tonnes at Newcastle Port in 2012 through a facility owned by PWCS pursuant to an agreement between Yancoal Australia and PWCS, increasing to 11.5 million tonnes per year from 2013 and 11.9 million tonnes from 2015. Yancoal Australia may apply for additional capacity at PWCS’s terminal 4 if the approval to construct this terminal can be granted. In addition, Yancoal Australia owns a 5.6% interest in Wiggins Island Coal Export Terminal Holdings Pty Limited in Queensland, which is the parent company of the developer of the Wiggins Island Coal Export Terminal. Yancoal Australia has been allocated an annual port capacity of 26.8 million tonnes in 2013. We believe these allocated port capacities will support current export sales.

Mining process

The geological characteristics of our reserves largely determine the coal mining method that we employ. We use two primary methods to mine coal: underground mining and open-pit mining.

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PRC underground mining operations

Our PRC underground mining operations consist of four main steps: tunneling, coal extraction, transportation and coal preparation. The tunneling process is necessary for the construction of underground roadways, which are required for the installation of mining equipment. We conduct a majority of our tunneling using high-powered headers and use this method whenever geological conditions permit. The extraction process is undertaken by a standardized and fully mechanized longwall operation, which includes shearers that work in conjunction with conveyers to cut and transport the coal away from the longwall work face.

The shaft hoist system equipment that we use at most of our mines was imported. Coal is transported from the coal shaft either to a surface storage or directly to a coal preparation plant. In addition to the main coal shaft, our mines also have a service shaft and supplemental roadways and rail systems within the mines that provide a means of underground transportation for workers and equipment.

After raw coal is carried to the surface, it undergoes a mechanized selection process that separates coal from other mineral materials. A small portion of such selected coal is directly sold to customers as raw coal, and the remainder is transported to our coal preparation plants for further processing and classification.

Australian open-pit mining operations

The open-pit mining process involves the removal of topsoil and overburden (earth and rock covering the coal), tunneling and extraction of coal from coal seams. The extracted coal undergoes selection and is then transported to treatment facilities for preparation. After coal is removed, we restore the affected land by replacing the overburden and topsoil.

Australian mining operations

With respect to underground mines in our Yancoal Australia mining operations, we conduct continuous tunneling, longwall operations and coal extraction by the fully mechanized caving method. Open-pit mining is used when coal is found relatively close to the surface, which is the same as our domestic open-pit mining operations.

Materials, Water and Energy Supply

PRC mining operations

The primary materials we use to conduct our coal mining and processing operations are steel to support work faces and underground tunnels, cement for the construction of underground tunnels and ground structures and water used in our production process. We procure steel primarily from Shandong Shiheng Special Steel Group Co., Ltd., Shandong Iron and Steel Group Co., Ltd., Xilin Steel Group Acheng Steel Co., Ltd. and Angang Steel Company Limited and cement primarily from Shandong Lucheng Cement Company, Ltd. and Shandong Luzhu Group Cement Company Ltd. We procure water primarily from the Yankuang Group pursuant to the Materials Supply Agreement and its supplemental agreements, and, to a lesser extent, from local water companies. The prices of steel, cement and water is set at market rates or determined through negotiations. We believe that we have well-established, cooperative relationships with our suppliers, enabling us to secure reliable supplies of materials required in our production process. We believe that a number of alternative suppliers exist for our key materials in our coal operations, accordingly, we do not foresee any difficulty in obtaining adequate supplies.

We use a significant amount of electricity in our operations. Even though we have not experienced any material disruptions in our electricity supply in the past, we acquired Hua Ju Energy to secure a stable supply of energy for Nantun, Xinglongzhuang, Baodian, Dongtan, Jining II, Jining III, Beisu and Yangcun Coal Mines and to reduce our electricity costs. After we commenced selling substantially all of the electricity generated by Hua Ju Energy to the local grid company in 2011, we began to purchase electricity from the local grid company for Nantun, Xinglongzhuang, Baodian, Dongtan, Jining II, Jining III Coal Mines. We also purchase electricity from the local grid company for Beisu and Yangcun Coal Mines after we acquired them in May 2012.

Australian mining operations

Similar to our domestic coal mining and preparation operations, the primary materials we use in our Australian mining operations are steel, cement, explosives and water. We procure such materials primarily from local suppliers with which we have established long-standing relationships, and are able to procure sufficient materials for our mining and preparation operations.

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Competition

PRC mining operations

Our primary market, the PRC domestic coal market, is characterized by numerous small-scale coal suppliers. Although the PRC coal market is segmented principally by geographic regions due to the wide distribution of coal reserves, the domestic market in China is dominated by a number of large-scale coal producers. We compete principally on the basis of the availability and cost of transportation, coal quality and timely deliveries.

Our PRC competitors primarily include a number of coal mines located in Shanxi, Shaanxi and Inner Mongolia. Certain of our competitors from these regions have substantial reserves and favorable geological conditions. However, these competitors incur significant transportation costs when they supply to their end-user customers located in eastern China. In addition to coal mines located in Shanxi, Shaanxi Provinces and Inner Mongolia Autonomous Region, we also compete with local mines located in close proximity to our customers. In addition, we expect to face increasingly intense competition among coal mining enterprises as the results of an significant increase in the amount of coal export to China and an increase of industry giants in the coal mining industry due to the industry reform. Although we have strengths in the quality of our coal product and our sales network, we may not be able to compete effectively with Shandong Energy in this region. Our failure to compete effectively may in turn materially and adversely affect our results of operations.

Australian mining operations

We primarily compete with several large coal mining enterprises in Australia, including BHP Billiton, Peabody Energy Australia, Rio Tinto Coal, Xstrata and Whitehaven Coal. Given that we mainly export our coal production in Australia to other Asian countries, particularly South Korea and Japan, we also compete with other mining enterprises located in China, Indonesia and Inner Mongolia, some of which are located in close proximity to our customers. Some of our competitors are large mining companies with a longer operating history, greater financial resources, stronger brand recognition and greater economies of scale as compared to our Company. However, we believe we are able to maintain our competitiveness. Through the use of our independently developed longwall top caving mining method, we believe we are able to extract coal more efficiently in our mining operation than our competitors, particularly those competitors with mining operations that involve coal extraction from thick coal seams.

Seasonality

Our coal business is not affected by seasonality.

Quality control

We have implemented a quality assurance program at each of our PRC coal mines to control quality throughout our coal operations from production to transportation. Utilizing advanced processing technology and management techniques, our coal preparation plants are able to separate both metal and non-metal impurities from coal. Our quality inspection division within our sales and marketing department conducts spot inspections on our coal production to maintain high quality standards.

Each of Nantun, Xinglongzhuang, Baodian, Dongtan, Jining II, Jining III, Beisu, Yangcun, Zhaolou and Tianchi Coal Mines has obtained the Quality/Environmental Management/Occupational Health and Safety Certificate.

Each of Nantun, Baodian, Dongtan, Jining II, Jining III Coal Mines has obtained Measurement Management System AAA certificate. We have been awarded a National Quality Management Award, a China Quality Tripod and an Asia-Pacific International Quality Gold Medal. In addition, we were awarded the Quality Excellence Award (Asian Recognition for Excellent in Quality Practice) by the Asian Network for Quality in 2012, which made us the only Chinese coal company which has ever won this prize.

Yancoal Australia has engaged Bureau Veritas, Societe Generale De Surveillance and ALS Laboratory Group to supervise and inspect the quality of the coal produced from the respective mines in Australia to ensure quality control and advise on quality improvement.

Safety control

In our PRC operations, we have implemented a safety control program to achieve the targets set in our internal guidelines for safety and risk control management and to maintain compliance with the PRC Coal Industry Law and the National Mining Safety Law in China. In Australia, our operations in New South Wales comply with the Coal Mine Health and Safety Act 2002 (NSW) and Occupational Health and Safety Act 2011 (NSW), our operations in Queensland comply with the Occupational Health and Safety Act 2011 (QLD) and Coal Mining Safety and Health Act 1999 (QLD) and our operations in West Australia comply with the Coal Mine Safety and Inspection Act 1994 (WA) and Occupational Health and Safety Act 1984 (WA).

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Our safety control program combines close supervision and routine inspection of mining conditions with continual implementation of safety features and procedures at our mines and safety training for our production team. In addition, in our PRC operations, the compensation of the officers and managers of each division reflects the division’s safety record. Each of our mines has a safety inspection unit which is responsible for the supervision and inspection of our mining activities. We reward employees who report unsafe mining conditions to encourage accident prevention.

As a result of our safety control program, we have been able to maintain a zero fatality rate in our PRC operations since 2007 compared with the national average of 0.374 fatalities per million tonnes of coal produced in 2012, according to the State Administration of Work Safety of the PRC. In 2012, we produced approximately 68.7 million tonnes of coal in our PRC operations and did not experience any production accidents that involved serious work injuries or death. We have been continuously reviewing and evaluating our safety control and performance in Australia. With respect to our Australian operations in 2012, our lost time injury frequency rate, measured as the number of lost time injuries per million man-hours worked, was 2.5 for open-pit mines and 13 for underground mines. We had no fatalities in our Australian operations in 2012.

Environmental protection

We are subject to PRC environmental protection laws and regulations which impose fees for the discharge of waste substances and require the payment of fines for serious pollution. PRC regulations also authorize government agencies to close any facility that fails to comply with orders to cease, or bring into compliance with relevant laws and regulations, operations that cause environmental damage. In addition, the operations of Yancoal Australia must comply with relevant Australian environmental protection laws and regulations. In 2012, we incurred expenses related to environmental protection of RMB175.3 million.

Railway Transportation Business

In addition to transporting coal to support our own operations, we also provide railway transportation services to our customers, including the Yankuang Group, for fees. In 2012, we transported 17.5 million tonnes of coal on our railway network, representing a decrease of 0.6 million tonnes, or 3.2%, from 18.1 million tonnes in 2011. We generated sales income of RMB464.1 million from railway transportation services in 2012, representing a decrease of RMB12.8 million, or 2.7%, from RMB476.9 million in 2011.

We own ten steam locomotives, two heavy-duty rail motors and approximately 204 kilometers of railway tracks constructed for coal transportation that connect most of our coal mines with Zouxian Power Plant located in Jining City, Shandong. Our railway network also connects to two major national railways, namely, Beijing-Shanghai Railway and Yanzhou-Shijiugang Railway. Our railway network provides us with substantial control over a major means of transportation for our key product, allowing us to benefit from the synergies from coal production, sales and transportation. As of December 31, 2012, our railway transportation business had 3,626 employees.

We maintain ISO 9001 quality accreditation, ISO 14001 environmental management certification, OHS 18000 occupational safety and health certificate and ISO 10012:2003 management certification for the operation of our railway network.

Coal Chemical Business

Our coal chemical business focuses on the production of methanol, a liquid commodity that can be produced from coal or natural gas. We operate our coal chemical business through Yulin Nenghua and Tianhao Chemicals. In 2012, we produced 572,000 tonnes of methanol and sold 574,000 tonnes of methanol. We generated sales income of RMB1,118.0 million in 2012, representing an increase of RMB58.6 million, or 5.5%, from RMB1,059.3 million in 2011. Yulin Nenghua produced 552,000 tonnes of methanol, and Tianhao Chemicals produced 20,000 tonnes of methanol, in 2012. We are in the process of disposing Tianhao Chemical’s methanol assets. In addition, we are currently constructing a 600,000-tonne methanol project in Ordos City, Inner Mongolia Autonomous Region, which we expect to become operational in the second half of 2013.

Sales and marketing

Our coal chemical sales are made pursuant to sales contracts that we enter into from time to time with customers. We sell our methanol exclusively in China and predominately to chemical producers in northern and eastern China and methanol distributors. We rely on regional highways to deliver our products.

Pricing

The pricing for our methanol product is generally based on negotiation between the contracting parties, taking into consideration prevailing market prices, market conditions and the customer’s creditworthiness.

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Production process

Yulin Nenghua. At Yunlin Nenghua’s plant, raw coal is pulverized, cleaned and then fed to a gasifier bed where it reacts with oxygen and steam. The product is synthesized into crude methanol and then purified through distillation.

Materials, water and energy supply

Coal and coke oven waste gas are the primary materials in our methanol production. Production at Yulin Nenghua is reliant on thermal coal, which it currently sources from local coal mines owned by third parties. We plan to source thermal coal internally once our adjoining Yushuwan Coal Mine is registered and commences operations. Yulin Nenghua sources water from a local reservoir.

Quality control

We have implemented a series of quality control measures for our coal chemical operations to ensure product quality and obtained AAA measurement management system, ISO 9001 quality accreditation and ISO 14001 environmental management certification in November 2009. We perform regular inspections and maintenance on our methanol plants.

Safety control

For our coal chemical operations, we have implemented safety control measures in compliance with the People’s Republic of China Production Safety Law, the People’s Republic of China Regulations on the Safe Administration of Dangerous Chemicals and other safety guidelines for chemical manufacturers.

Competition

We compete with domestic methanol manufacturers in Shanxi and Shaanxi Provinces and the Inner Mongolia Autonomous Region. We expect to benefit from economies of scale as Yulin Nenghua’s 600,000-tonne methanol project achieves optimal utilization of its facilities and Ordos Neng Hua’s 600,000-tonne methanol plant commences operations in the second half of 2013.

Seasonality

Our coal chemical operations are not affected by seasonality.

Electric Power and Heat Supply Business

As of the date of this annual report, we owned and operated seven power plants, which generate electricity for internal use and external sales. In 2012, we generated a total of 1,155.2 million KWh of electricity, 856.4 million KWh of which we sold to third parties. We generated sales income of RMB323.6 million in 2012, representing a decrease of RMB4.4 million, or 1.3%, from RMB328.0 million in 2011.

Hua Ju Energy operates coal-fired power plants whose main facilities consist of energy conversion CFB boilers and extraction and condensing steam turbines. The power plants at Hua Ju Energy have an aggregate installed capacity of 144 MW. In 2010, 2011 and 2012, Hua Ju Energy generated 1,090.4 million KWh, 1,028.8 million KWh and 968.2 million KWh, respectively, and sold 469.6 million KWh, 895.5 million KWh and 831.9 million KWh, respectively, to the local power grid company.

The power plants at Yulin Nenghua and Tianhao Chemicals were established with the primary intention to satisfy the power demand of the methanol projects of these two entities; we sell a small amount of electricity to third parties. These plants had an aggregate installed capacity of 84 MW as of the date of this annual report; however, Tianhao Chemicals has stopped generating electricity since January 1, 2012 due to the high cost of fuel, and we are in the process of disposing of the power plant together with Tianhao Chemical’s methanol assets. In 2012, the power plants operated by Yulin Nenghua generated 187.0 million KWh of electricity, of which 24.5 million KWh was sold to third parties.

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We commenced the construction of the Zhaolou Coal Mine power plant for Zhaolou Coal Mine in March 2010. The integrated power plant has two phases with a designed capacity of 300 MW for each phase. As of the date of this annual report, phase I was under construction. For further information on the Zhaolou Coal Mine power plants, please see “D. Property, Plant and Equipment — Methanol and Cogeneration Power Plants — Zhaolou Coal Mine Power Plants.”

We commenced heat supply operations, which consist of the production and sale of heat, following our acquisition of Hua Ju Energy in 2009. In 2012, Hua Ju Energy generated 1.4 million steam tonnes of heat energy. Our coal mines consume the substantial majority of heat energy produced by Hua Ju Energy. We sold 0.2 million steam tonnes of heat to third parties and generated sales income of RMB39.9 million in 2012.

Sales and marketing

We consume a major portion of the heat generated by our power plants and, to a lesser extent, sell to the Yankuang Group. In addition to our own use and our sales to the Yankuang Group, we sold 73.5% of the electric power we produced to other end-users through power grids in 2012.

Pricing

The pricing and adjustments for the on-grid tariff and the pricing of our heat products are determined in accordance with regulations set by price administration authorities.

Production process

Yulin Nenghua. We select, break, grind and feed coal to a boiler where the coal is burned to generate steam, which is converted by steam turbines into electricity.

Hua Ju Energy. We recycle by-products of our coal mining operations, such as coal gangue and coal slurry, to generate electricity. Coal gangue and coal slurry are fed to a CFB boiler by means of a conveyer belt and fuel-feeding device where they are burned to generate steam, which is converted by steam turbines into electricity. The power plants of Hua Ju Energy are cogeneration systems that are able to produce heat simultaneously with power generation. Part of the steam produced in power generation is extracted from the steam turbines and provided to our mining operations via a heat supply system.

In the production processes, we filter the exhaust gas that we produce and recycle the cinder for future use.

Materials, water and energy supply

Our power plants are all coal-fired power plants. The power plants of Hua Ju Energy generate electricity by recycling coal gangue and coal slurry. Yulin Nenghua currently sources thermal coal from local coal mines.

Quality control

Hua Ju Energy obtained ISO 9001 quality accreditation and ISO 14001 environmental management certification in November 2003 and has maintained its certification since then. Yulin Nenghua obtained AAA measurement management system, ISO 9001 quality accreditation and ISO 14001 environmental management certification in November 2009.

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Safety control

Safety measures for our electric power and heat supply operations were designed to meet the requirement of the Electricity Law and other related laws.

Seasonality

Our electric power operations are not affected by seasonality. Our heat supply operations are affected by seasonality and experience higher demand during winter.

Regulatory Oversight of Our Group

Regulation of the PRC Coal Industry

Mining activities in the PRC are also subject to the MLR. To establish a coal mining enterprise under the Coal Industry Law of the People’s Republic of China, amended in 2011 (the “PRC Coal Industry Law”), the applicant must submit an application to the relevant department in charge of the coal industry. After obtaining approval to establish a coal mining enterprise, the applicant will be granted a mining permit by the MLR. Thereafter, the applicant must obtain a coal production permit before it commences coal production. Coal mining enterprises that have legally obtained coal production licenses will have the right to sell the coal that they produce. To establish a coal trading enterprise, an applicant must apply for a different business license and may engage in coal trading only after it obtains a trading license from the relevant administrative department of industry and commerce.

The Mineral Resources Law of the PRC (the “Mineral Resources Law”) regulates any matters relating to the planning or the exploration, exploitation and mining of mineral resources. According to the Mineral Resources Law, all mineral resources in China, including coal, are owned by the State. Any enterprise planning to engage in the exploration, development and mining of mineral resources must obtain exploration rights and mining rights before commencing the relevant activities. The transfer of exploration and exploitation rights shall be subject to governmental approval pursuant to the PRC Coal Industry Law, the Mineral Resources Law and other relevant regulations.

The following is a summary of the principal laws, regulations, policies and administrative directives to which we are subject.

Pricing Laws

Until 2002, the production and pricing of coal was generally subject to the close control and supervision of the PRC government, which centrally managed the production and pricing of coal. To transition from a planned economy to market economy practices, the PRC government eliminated the state guidelines for coal prices on January 1, 2002 and took other measures intended to establish a pricing mechanism that would reflect market demand. In December 2012, the State Council issued a guideline to further implement the market reform for thermal coal. Pursuant to the guideline, beginning in 2013, the PRC government will discontinue the compulsory thermal coal supply contracts arrangement, which required coal producers to sell thermal coal to power generation enterprises at preferential prices set by the government. In addition, prices of thermal coal will be negotiated between power generation enterprises and coal producers, instead of pursuant to government-guided prices.

Regulation of fees and taxes

The table below sets forth material taxes and fees that are imposed upon coal producers in China, as well as reserves which we are required to set aside.

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Item	Base	Rate
Corporate income tax	Taxable income	25%
VAT	Sales revenue	17%
Business tax	Revenue from service	3% or 5%
City construction tax	Amount of VAT and business tax	7%
Education surcharge	Amount of VAT and business tax	3%
Local education surcharge	Amount of VAT and business tax	2%
Resource tax	Aggregate volume of raw coal sold or used (1)	RMB3.6 per tonne (Shandong Province) RMB3.2 per tonne (Shanxi Province)
Compensation for the depletion of coal resources	Revenue from coal produced by us	1%
Price adjustment fund	Volume of raw coal produced or sales volume of merchantable coal	1. Jining City, Shandong Province: RMB8 per tonne based on volume of raw coal produced; 2. Heze City, Shandong Province: (1) RMB1.5 per tonne for 20% of the sales volume of clean coal and RMB20 per tonne for 80% of the sales volume of clean coal; (2) RMB1 per tonne for 20% of the sales volume of other types of coal and RMB15 per tonne for 80% of the sales volume of other types of coal.

(1) The resource tax applicable to our coal operation in Shandong and Shanxi Provinces is calculated by multiplying the aggregate volume of raw coal sold and raw coal consumed in the production of clean coal by the applicable per tonne resource tax in the respective province.

Coal producers may be fined if they damage the environment, arable land, grasslands or forest areas. Under the Mineral Resources Law, if a mining enterprise’s mining activities result in damage to arable land, grasslands or forest areas, the mining enterprise must return the land to an arable state or plant trees or grass or take other restorative measures. The Mineral Resources Law and other applicable laws and regulations also state that anyone who causes others to suffer loss in terms of production or living standards is liable for the loss and must compensate the affected persons and remedy the situation.

Additionally, all coal producers are subject to PRC environmental protection laws and regulations which currently impose fees for the discharge of waste substances, require the payment of fines for serious pollution and provide for the discretion of the PRC government to close any facility which fails to comply with orders requiring it to cease or cure operations causing environmental damage.

Foreign exchange laws

The Notice of the State Administration of Foreign Exchange on Deciding the External Financing Guarantee Balance Quota of Domestic Banks in 2011 (Hui Fa [2011] No. 30), promulgated by the SAFE on July 27, 2011, provides that the SAFE will conduct a strict review of any application from a domestic enterprise with respect to external financing guarantees. In addition, when domestic banks provide offshore financing guarantees, the SAFE will conduct a strict review of the financing measures with respect to the external financing guarantee. The proceeds of any offshore financing under an offshore financing guarantee must not be repatriated into the PRC, directly or indirectly, either in the form of equity or debt interests, through, including but not limited to, the following methods:

• financing applied towards the repayment of the original loans of the enterprise or other offshore companies which were repatriated into the PRC through equity or debt interests;

• financing directly applied towards the acquisition of the equity of an offshore target company, and the principal assets of the target company are predominantly located in the PRC; or other methods of repatriation recognized by the SAFE.

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Import and export laws

According to the Foreign Trade Law, the Cargo Import and Export Ordinance and the Administrative Measures of Coal Export Quota, coal exports prior to 2013 are subject to State control and required governmental approval.

Our company has not been authorized as a PRC coal exporter. Our coal exports are conducted through three export agents, namely China National Coal Industry Import and Export Corporation, China National Minerals Import and Export Company Limited and Shanxi Coal Import and Export Group Company.

Pursuant to the Administrative Measures of Coal Export Quota, the NDRC and the MOC have been responsible for determining China’s national coal export quota and allocating the quota among authorized coal exporters. Upon receiving a quota approval, authorized coal exporters may apply for coal export permits to the relevant authority designated by the MOC. Authorized coal exporters are also required to report their monthly quota usage to the NDRC.

The regulations provided that quotas may be adjusted in the event of:

• a major change in the international market;

• a major change in domestic coal resources;

• an imbalance in the usage of the coal export quota by an authorized coal exporter compared to its allocation of the coal export quota; and

• other circumstances which require an adjustment to the coal export quotas.

The total national quotas approved for coal exports in 2011 and 2012 remained at 38.0 million tonnes. The first 19.0 million tonnes’ national quota for 2013 has been granted to exporters.

According to the Notice of the Customs Tariff Committee of the State Council on Tariff Adjustment on Certain Export Commodities (Notice 2008 No. 56), since August 20, 2008, the provisional tariff rate of coke, coking coal and soft coal has been 40%, 10% and 10%, respectively. However, we do not export any coke, coking coal or soft coal from the PRC and we do not expect changes in export tariffs will affect us.

Domestic trading regulations

Pursuant to the Measures for the Regulation of Coal Operations promulgated by the NDRC on December 27, 2004, the State implemented a system to examine the qualifications of an entity to engage in coal operations, including the wholesale and retail of raw coal and processed coal products and the processing and distribution of coal for civilian use. Before an entity can engage in coal operations, it must obtain a coal operation qualification certificate. A coal production enterprise that deals in coal products produced and processed by a third party is required to obtain a coal operation qualification.

Environmental protection

China has promulgated a series of laws and regulations which establish national and local legal frameworks for environmental protection. These laws and regulations include standards applicable to emission controls, discharges of wastes and pollutants to the environment, generation, handling, storage, transportation, treatment and disposal of waste materials by production facilities, land rehabilitation and reforestation.

The Environmental Protection Law requires any entity operating a facility that produces pollutants or may create a hazard to incorporate environmental protection measures into its operations and to establish an environmental protection responsibility system which includes effective measures to control and properly dispose of waste materials.

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According to the Law on Prevention and Control of Water Pollution of the PRC, and the Administrative Regulations on the Levy and Use of Discharge Fees, any new construction projects which directly or indirectly discharge pollutants to water, such as coal mines and coking plants, must conduct an environmental impact assessment. Every new production facility must be equipped with wastewater processing facilities which must be put in use together with the production facilities. Construction projects that discharge pollutants into water shall pay a pollutant discharge fee in accordance with state regulations.

The rehabilitation of mining sites is another priority of the PRC government. Under the Law of Land Administration of the PRC as amended on August 28, 2004, the Regulation on Land Reclamation effected on March 5, 2011 and the Implementation Measures on the Regulation on Land Reclamation effected on March 1, 2013, coal producers must undertake measures to restore a mining site to its original state within a prescribed time frame if their mining activities result in damage to arable land, grassland or forest. The rehabilitated land must meet rehabilitation standards, as required by law from time to time, and may only be subsequently used upon examination and approval by the land authorities.

In addition to the PRC environmental laws and regulations, China is a signatory to the 1992 United Nations Framework Convention on Climate Change and the 1998 Kyoto Protocol, which propose emission targets to reduce greenhouse gas emissions. The Kyoto Protocol came into force in 2005. At present, the Kyoto Protocol has not set any specific emission targets for certain countries, including China.

Mining safety

On June 7, 2005, the State Council promulgated Several Opinions on Promoting the Healthy Development of the Coal Industry, which contains the PRC government’s policies with respect to the development and restructuring of the coal industry. The opinions reiterated the PRC government’s policies with respect to the administration of coal reserves, enhancement of coal mine safety, encouragement of industry consolidation among coal producers, acceleration of the construction of large coal production bases, improvement of mining techniques and equipment for coal production and the organization and regulation of small coal mines.

According to the Measures for Implementing Work Safety Permits in Coal Mine Enterprises issued by the State Administration of Work Safety and the SACMS, a coal mine enterprise without a work safety permit may not engage in coal production activities. Coal mining enterprises and their mines that do not satisfy the safety conditions set forth in this document, or those that violate the provisions of this document, may be punished by fines, warnings, temporary suspension of the work safety permit, mandatory remediation measures, orders to cease production and cancellation of the work safety permit. Coal mine enterprises that remain compliant with the requirements set in these documents may apply for administrative approval to extend the validity period of their Work Safety Permits.

The Special Regulations by the State Council on Preventing Work Safety Related Accidents in Coal Mines were promulgated and entered into effect on September 3, 2005. These regulations specify that coal mine enterprises are responsible for preventing coal mine work safety-related accidents. If a coal mine has not obtained, in accordance with the law, a mining right permit, work safety permit, coal production permit or business license and if the mine manager has not obtained, in accordance with the law, a mine manager qualification certificate and a mine manager safety qualification certificate, the coal mine may not engage in production. Coal mining enterprises should establish a sound system for the detection, elimination, treatment and reporting of latent work safety-related dangers. If a major latent work safety-related danger exists in a coal mine, the enterprise should immediately suspend production and eliminate the latent danger. Coal mining enterprises should provide their personnel working underground and their special operation personnel with safety education and training in accordance with relevant state regulations. The person in charge of a coal mine and the production and operation management personnel should go into mines and act as foremen on a rotating basis in accordance with state regulations, and a file recording their entry into the mine should be maintained.

In addition, the State Administration of Work Safety issued three sets of measures on September 26, 2005: (i) the Measures for Determining Major Latent Work Safety Related Dangers in Coal Mines (for Trial Implementation); (ii) the Implementing Measures for the Detection and Elimination of Latent Dangers in Coal Mines and the Rectification and Closure of Such Mines (for Trial Implementation); and (iii) the Measures for the Supervision and Inspection of Coal Mine Safety Training (for Trial Implementation). On October 31, 2005, the State Administration of Work Safety issued the Guiding Opinions on Persons in Charge of Coal Mines and Production and Operation Management Personnel Going into Mines as Foremen. The State Administration of Work Safety and Ministry of Finance of the PRC jointly issued the Incentive Arrangement for Report on Working Safety on May 2, 2012, which encourages reporting on material accident hazards on working safety systems and other illegal activities.

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The State Administration of Work Safety, the State Administration of Coal Mine Safety and the All China Federation of Trade Unions jointly issued the Rules regarding the Working Safety Construction of Coal Mine Working Teams in June 2012, which requires coal mining enterprises to promote working safety target management and improve the salary structure to reflect the combination of working safety, production and profits. In addition, coal mining enterprises are required to improve working environments and labor protection facilities, provide employees with labor protection articles and occupational health examinations, establish occupational health files for employees and provide relevant remuneration for workers engaging in hazardous works.

Coal mining industry and resources integration

Several measures have been enacted by various PRC government and provincial authorities to promote the integration and enhancement of mineral resources to maximize domestic coal production and encourage developmental efficiency.

The General Office of the Shandong Provincial Government issued the Notice to Implement Circular Guo Fa Ban [2006] No. 108 and Notice to Effectively Implement Integration of Mineral Resources (Lu Zheng Ban Fa [2007] No. 37), on June 19, 2007, which further implement Circular Guo Fa Ban [2006] No. 108 and promote the integration of mineral resources in Shandong Province.

In addition, the Shandong Provincial Government issued the Notice to Deepen Integration Works of Mineral Resources (Lu Zheng Ban Fa [2010] No. 1), on January 4, 2010, which requires further promotion of integration of mineral resources, reduces the number of mines and mining approvals, and enhances intensive production in Shandong Province. The State-owned Assets Supervision and Administration Commission of Shandong Province issued the Notice Regarding Document Lu Zheng Ban Fa [2010] No. 1 from the General Office of Provincial Government to Deepen the Integration Work of Integrated Exploitation of Mineral Resources (Lu Guozi Guihua [2010] No. 1) on February 3, 2010, which requires enterprises under provincial administration to review and integrate resources, as well as actively participate in the integration of mineral resources province-wide.

The government authorities of Inner Mongolia issued the Notice of Printing and Distributing the Work Plan of Mergers and Reorganizations of Coal Mining Enterprises in Inner Mongolia Autonomous Region (Nei Zheng Fa [2011] No. 32) on March 15, 2011, which sets forth the guiding principles, integrative approach, applicable policies, regulations and working requirements for coal resources in the region. By the end of 2013, the notice indicates that coal mining enterprises located in Inner Mongolia Autonomous Region must achieve production of 1.2 million tonnes per annum (three million tonnes per annum may apply to certain regions upon certain conditions) or be required to merge with other enterprises. Enterprises with a production capacity of more than five million tonnes of raw coal, among others, or enterprises with at least either one underground coal mine with a singular well production capacity of more than 1.2 million tonnes or an open-pit coal mine with a singular well production capacity of more than three million tonnes, subject to certain operational safety conditions, will be given preference as entities into which other smaller entities may merge.

In addition, the government authorities of Inner Mongolia Autonomous Region issued the Notice of Working Well on the Related Issues Concerning Integration of Coal Resources (Nei Zheng Ban Fa [2011] No. 92) on October 9, 2011, which sets forth supplemental information on the determination of the status of coal mining entities and the scope of coal resources to be integrated in the region.

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The National Energy Administration of the PRC issued the amended Coal Mining Industry Policy in February 2013 seeking for comments, which aims to further implement the reform of coal mining enterprises and the market-oriented reform.

These mining industry and resources integration regulations will affect the production capacity and rates of our mines that are located in the particular provinces or regions.

Regulation of the Australian Coal Industry

Our operations in Australia are subject to laws and regulations of general application governing mining and processing, land tenure and use, environmental requirements, including site-specific environmental licenses, permits and statutory authorizations, industrial relations, workplace health and safety, trade and export, competition, access to infrastructure, foreign investment and taxation. These regulations are implemented by various federal, state and local government departments and authorities, including the Department of Resources, Energy and Tourism, the Department of Sustainability, Environment, Water, Population and Communities and the National Native Title Tribunal.

Environmental and planning issues

Our mining operations in Australia are regulated by Australian federal, state and local governments with respect to environmental issues (such as water quality, air quality, dust impact, noise impact) and planning issues (such as approvals to expand existing mines or to develop new mines or to change mining interests). Australian state governments require coal companies to post deposits or give other security on the land which is being used for mining and exploration, with those deposits being returned or security released after satisfactory reclamation is completed.

The particular provisions of the various state and territory environment and planning legal regimes vary depending upon the jurisdiction. Despite variation in details, each state and territory has a system involving broadly at least two major phases, including: (i) obtaining major environment/planning developmental approval addressing planning and significant environmental issues and (ii) obtaining pollution control approvals regarding pollution control issues such as emissions to the atmosphere; emissions in waters; noise impact, impact from blasting; dust impact; and the generation, handling, storage and transportation of waste.

The federal environmental protection regime will apply if matters of national environmental significance are likely to be significantly impacted. If so, federal regulatory approval will be required. Most coal projects require such federal approval.

Occupational health and safety

The combined effect of various state and federal statutes requires an employer to ensure that persons employed in a mine are safe from injury by providing a safe working environment and systems of work; safety machinery; safety equipment, plant and work materials; and appropriate information, instruction, training and supervision.

In recognition of the specialized nature of mining and mining activities, specific occupational health and safety obligations have been mandated under law and legislation that deals specifically with the coal mining industry. Mining employers, owners, directors and managers, persons in control of work places, mine managers, supervisors and employees are all subject to these duties. The Australian federal government is currently conducting a review of health and safety legislation with a view to harmonizing requirements across the country.

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It is mandatory for an employer to have insurance coverage with respect to the compensation of injured workers. Similar coverage is in effect throughout Australia which is of a no-fault nature and which provides for benefits up to a prescribed level. The specific benefits vary by jurisdiction, but generally include the payment of weekly compensation to an injured employee, together with payment of medical, hospital and related expenses. The injured employee may have a right to sue his or her employer for further damages if a case of negligence can be established (but on the condition that the injured employee waives his or her right to the insurance coverage).

MRRT

On March 29, 2012, the Australian MRRT became law, effective July 1, 2012. The MRRT is a profits-based tax that is charged at an effective rate of 22.5% on the assessable profits (excess of annual mining revenue over annual mining expenditures with respect to mineral interests, less certain allowances) of, among others, coal mining enterprises. According to the relevant provisions of the MRRT tax laws, our subsidiaries in Australia are required to determine the starting base allowance on their balance sheets. A book value or market value approach can be selected in calculating the starting base and may be amortized over the prescribed useful lives of such assets.

Carbon tax scheme

A number of countries, including Australia have ratified the Kyoto Protocol to the United Nations Framework Convention on Climate Change. The Australian government has devoted efforts in meeting the emissions target for Australia as set forth in the Kyoto Protocol. To this end, the Australian federal government has recently passed laws imposing a tax on the amount of carbon dioxide emissions by enterprises having significant emissions, which may include coal mining enterprises in Australia. In addition, the Australian federal government intends to gradually shift from a carbon tax scheme to a “cap and trade” carbon emissions scheme. The legislation became effective from July 1, 2012.

Foreign investment

There are no specific restrictions on foreign investment in Australia’s coal industry. However, under Australian law and Australia’s foreign investment policy, certain acquisitions require prior approval of the Treasurer of Australia. Generally, these include acquisitions of substantial interests (15% or more) in an Australian business where the value of the business’ total assets is, or the proposal value is, above A$244 million.

Power generation industry

The Electric Power Law and the Electric Power Regulatory Ordinance

The Electric Power Law of the PRC (the “Electric Power Law”) sets out the regulatory framework of the power industry. The Electric Power Law encourages power plant operators to focus on environmental protection and adopt new technology to decrease waste discharge.

In 2005, the State Council promulgated the Electric Power Regulatory Ordinance. The Electric Power Regulatory Ordinance sets forth regulatory requirements for many aspects of the power industry, including, among others, the issuance of electric power business permits, the regulatory inspections of power generators and grid companies and the legal liabilities resulting from violations of the regulatory requirements.

Approvals and licenses for power plants

Applications for all new coal-fired power plants are required to be submitted to the NDRC for approval, as well as to the State Council for significant power plant projects. According to the Provisions on the Administration of Electric Power Business Licenses, applicants are also required to obtain requisite permits, including an Electric Power Business for Power Generation and approvals related to plant site, land use rights, construction and the environment.

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Pricing

Since 1996, the Electric Power Law has set forth general principles for determining power tariffs. The Interim Provisions for the Administration of Grid Power Price promulgated by NDRC states that tariffs are to be formulated to provide reasonable compensation for costs and a reasonable return on investment, to share expenses fairly and to promote the construction of power projects. With the exception of grid power prices set by governmental bids or power plants that produce alternative energy, grid power prices of new power plants within the same region should be uniform. The on-grid tariffs for planned output and excess output are subject to a review and approval process involving the NDRC and the provincial price bureaus. In 2004, the NDRC, with the approval of the State Council, issued a policy to link thermal coal and power prices. This policy allows on-grid tariffs to increase if the average price of coal increases by more than 5% within a six-month period.

Safety

In accordance with the Measures for Supervising the Safe Production of Electricity, issued by the SERC, power plants are responsible for maintaining safe operations in accordance with requirements set by the regional grid in which they are located. Power plants are required to report worker fatalities or serious or extraordinary accidents to the SERC and relevant local government authorities.

Coal chemical processing industry

The PRC Coal Industry Law, encourages and supports coal mining enterprises and other enterprises to produce both coal and electricity, coking coal and coal chemicals. In July 2006, the NDRC issued the Notice of Strengthening the Administration of Coal Chemical Processing Industry and Improving the Healthy Development of the Industry (Fa Gai Chan Ye [2011] No. 635), which was aimed at strengthening the coal chemical processing industry through the promotion of transportation safety, risk prevention and management standardization. According to the Enterprise Income Tax Law (the “EIT Law”) and its implementation regulations, enterprises that produce products which are not restricted by the State and satisfy State and industry standards by using resources encouraged by industrial policies of the State are eligible for preferential tax treatment. If an enterprise uses any of the materials that are listed in the Catalogue of Income Tax Preference for Enterprises of Comprehensive Utilization of Resources as a major raw material in its product, 90% of the total income derived from such product will be treated as taxable income under the preferential tax arrangement. Coke oven gas, one of the primary raw materials at one of our methanol production facilities, is one of the materials listed in the catalogue.

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D. Property, Plant and Equipment

Real Property and Leasehold Property

As of December 31, 2012, the net book value of our property, plant and equipment was RMB 39,503.1 million. The properties for which we own land use rights in China occupy an area of approximately 6.93 million square meters, while the coalfields to which we possess mining rights in Australia occupy an area of approximately 1.8 billion square meters. Under PRC law, land use rights for properties in China are granted for 50 years commencing from the respective grant dates of such land use rights and are freely transferable. In addition, the land ownership rights held by Yancoal Australia are held in perpetuity pursuant to Australian law.

As of the date of this annual report, we have not obtained certain land-use rights and building ownership certificates in China. In addition, we have not completed the registration procedure with relevant real estate administrative authorities with respect to certain properties we lease in China. We do not expect that our rights to use or occupy such properties will be challenged by third parties and as of the date of this annual report, we are not aware of any administrative or legal action with respect to these properties. However, we are prohibited from the transfer, lease, mortgage, or disposal of such properties until we obtain the relevant real estate or building ownership certificates.

Coal Mines and Coal Production Facilities

Nantun, Xinglongzhuang, Baodian, Dongtan, Jining II, Jining III, Beisu and Yangcun Coal Mines are all located in the southwestern part of Shandong Province. Except for Yangcun Coal Mine, all of these mines are connected by our railway network, which directly connect to our customers or the PRC national railway or highway systems. We acquired Jining II Coal Mine in 1998 and Jining III Coal Mine in 2001. We acquired Heze Nenghua, the operator of Tianchi Coal Mine in 2006 and subsequently the mining rights of Zhaolou Coal Mine through Heze Nenghua in 2008. Our wholly owned subsidiary, Ordos Neng Hua, acquired Anyuan Coal Mine in 2010 and acquired the mining rights of Zhuanlongwan coalfield through public bidding in 2011. In addition, Ordos Neng Hua acquired 80% of the equity interest in Inner Mongolia Xintai in 2011, which has operated Wenyu Coal Mine since July 2011.

We acquired Austar Coal Mine in Australia in 2004, and we acquired the entire equity interest in Yancoal Resources (formerly Felix) through Yancoal Australia in 2009, which operates Ashton Coal Mine, Yarrabee Coal Mine and Moolarben Coal Mine. We acquired an additional 30% of the equity interest in the Ashton Coal Mine Joint Venture and disposed of 51% of the equity interest in the Minerva Coal Mine Joint Venture in 2011. As of December 31, 2012, we held 90% of the equity interest in the Ashton Coal Mine Joint Venture. In August 2011, we acquired the entire equity interest of both Syntech Holdings Pty Ltd. and Syntech Holdings II Pty Ltd., which operate the Cameby Downs Coal Mine and have five exploration tenements that can be potentially developed. In September 2011, we acquired the entire equity interest of both Premier Coal, which operates the Premier Coal Mine and Wilga Exploration Area, and Premier Char. In May 2012, we purchased from Yankuang Group and Beisu Company all of the assets and liabilities of Beisu Coal Mine and Yangcun Coal Mine, including mining rights, building ownership certificates, mining and related equipment and other fixed assets. In addition, as a result of its merger with Gloucester in June 2012, Yancoal Australia is the largest listed Australian pure-play coal mining enterprise in terms of saleable coal production in 2011.

As of the date of this annual report, the following material approvals, permits and licenses need to be obtained or renewed for our coal mines or projects in China:

• the permit for our acquisition of Anyuan Coal Mine is pending regulatory review and approval by the Inner Mongolia government authorities. In addition, we are in the process of renewing the working safety permit, mining permit and coal production permit for Anyuan Coal Mine, which we expect to complete by the second half of 2013;

• we obtained the approval from the NDRC to conduct preliminary work on Shilawusu and Zhuanlongwan projects in December 2012 and March 2013, respectively;

• Yingpanhao Project has been included into the NDRC’s twelfth five-year plan for the coal mining industry in March 2012. We are in the process of obtaining permits for our commencement of construction on this project;

• we are in the process of obtaining a mining permit for Wanfu Project;

• we are undergoing transfer procedures for Yangcun and Beisu Coal Mines; and

• we are in the process of renewing the water pollution discharge permit for Jining II and Jining III Coal Mines.

In addition to the above, a number of material Australian regulatory approvals, permits and licenses are pending, outstanding, have not been applied for as yet or have expired, including:

• surface mining leases for the development of proposed additional stages of the Moolarben Coal Mine, as well as agreements with affected landholders (including a competitor of Yancoal Australia), which are still in process; and

• we have obtained the planning approval for the proposed additional “South East Open Cut” project of the Ashton Coal Mine from the Planning Institution of Australia. We expect to have the hearing for the Environmental Impact Assessment in the second half of 2013.

We operate substantially all of our mines either directly or through our subsidiaries and we have contracted the mining operations at Anyuan, Wenyu and Cameby Downs Coal Mines and Duralie open-pit mine at Gloucester Coal Mine to third party contractors.

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The map below shows the location of Nantun, Xinglongzhuang, Baodian, Dongtan, Jining II, Jining III Coal Mines and our railway system:

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The map below shows the location of Tianchi Coal Mine:

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The map below shows the location of Zhaolou Coal Mine:

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The map below shows the location of Anyuan and Wenyu Coal Mines:

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The map below shows the location of Beisu Coal Mine:

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The map below shows the location of Yangcun Coal Mine:

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The map below shows the location of Austar, Yarrabee, Ashton and Moolarben Coal Mines as well as advanced-exploration stage projects Athena, Harrybrandt, Wilpeena and Wilga.

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The map below shows the location of Cameby Downs Coal Mine:

30

The map below shows the location of Premier Coal Mine:

The map below shows the location of Gloucester, Donaldson and Middlemount Coal Mines and Monash Project:

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The Six Coal Mines

The following table sets forth information about Nantun, Xinglongzhuang, Baodian, Dongtan, Jining II, Jining III Coal Mines, which are directly owned and operated by the Company:

	Nantun	Xinglong- zhuang	Baodian	Dongtan	Jining II	Jining III	Total
Background data:
Commencement of construction	1966	1975	1977	1979	1989	1993	N/A
Commencement of commercial production	1973	1981	1986	1989	1997	2000	N/A
Coalfield area (square kilometers)	35.2	59.81	36.4	60.0	87.1	105.1	383.61
Reserve data:(1) (millions tonnes as of December 31, 2012)
Total in-place proven and probable reserves(1)	108.05	304.08	269.85	436.94	400.53	209.98	1.729.43
Mining recovery rate(2)(%)	81.20	81.26	80.45	84.09	79.51	80.46	N/A
Coal preparation plant recovery rate (%)(3)	74.31	86.82	72.51	46.99	72.71	62.65	65.37
Depth of mine (meters underground)	397.0	429.2	474.7	710.0	593.0	556.0	N/A
Average thickness of main coal seam (meters)	10.43	8.3	8.8	8.4	6.8	6.2	N/A
Type of coal	thermal coal	thermal coal	thermal coal	thermal coal	thermal coal	thermal coal	N/A
Leased/owned	owned	owned	owned	owned	owned	owned	N/A
Assigned/unassigned(4)	assigned	assigned	assigned	assigned	assigned	assigned	N/A
Average calorific value (Kcal/kg)	5290	5484	5507	5249	5158	5227	N/A
Sulfur content (%)	0.91	0.51	0.55	0.53	0.56	0.59	N/A
Production data: (million tonnes)
Designed raw coal production capacity	2.4	3.0	3.0	4.0	4.0	5.0	21.4
Designed washing capacity	1.8	3.0	3.0	4.0	3.0	5.0	19.8
Raw coal production
1997-2005	37.9	56.1	50.2	62.5	35.3	37.5	279.5
2006	3.9	7.2	5.6	8.0	4.0	6.8	35.5
2007	3.9	6.8	5.8	7.6	3.4	5.3	32.8
2008	3.5	6.6	6.0	7.0	3.9	6.1	33.1
2009	3.8	6.6	5.7	7.5	3.6	6.2	33.4
2010	3.6	6.8	6.1	7.4	4.2	6.2	34.3
2011	3.3	6.8	6.1	7.3	4.4	6.0	34.0
2012	3.2	7.0	6.1	7.6	3.7	5.5	33.1
Cumulative raw coal production as of December 31, 2012	63.1	103.9	91.6	114.9	62.5	79.7	515.7

(1) The proven and probable reserves of the above coal mines are based on the report dated February 6, 1998 prepared by International Mining Consultants Limited, a UK-based company, in accordance with the standards in Industry Guide 7.

Under Industry Guide 7, “proven reserves” are reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes, grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established. “Probable reserves” are reserves for which quantity and grade and/or quality are computed from information similar to that used for proven reserves, but the sites for inspection, sampling, and measurement are further apart or are otherwise less adequately spaced. The degree of assurance of “probable reserves,” although lower than that for proven reserves, is high enough to assume continuity between points of observation.

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The total proven and probable reserves as of the end of a year are derived by deducting the proven and probable reserves consumed in the coal production in the same year from the proven and probable reserves as of the end of the immediately preceding year. The distinction between proven and/or probable reserve classifications cannot be readily determined or defined.

(2) The mining recovery rate is the rate of the amount of coal recovered from a determined amount of proven and probable reserves, which is calculated by dividing the actual volume of coal recovered in a year by the volume of proven and probable reserves mined and consumed in the same year.

(3) “Coal preparation plant recovery rate” refers to the wash plant recovery rate of raw coal used during the production of our coal products.

(4) “Assigned” refers to coal reserves which have been committed to a particular mining complex (mine shafts, mining equipment, and plant facilities), and all coal which has been leased by the company to others. “Unassigned” refer to coal reserves which have not been committed, and which would require new mine shafts, mining equipment or plant facilities before operations could begin on the property.

Nantun Coal Mine

Nantun is located in the southern portion of our coalfield, with a coalfield area of approximately 35.2 square kilometers. Nantun began commercial production in 1973 with a designed annual raw coal production capacity of 2.4 million tonnes of coal. The main coal seam of Nantun is divided into four leaves. The thickness of the upper leaf averages 5.35 and 3.21 meters and the thickness of the lower leaf averages 0.89 and 1.03 meters. As of December 31, 2012, the total in-place proven and probable reserves on the main coal layer were approximately 108.05 million tonnes.

We primarily use the fully mechanized sublevel caving mining method to extract coal. As of December 31, 2012, Nantun produced coal from three work faces. Nantun’s coal preparation plant produces mainly No. 2 Clean Coal and employs movable-sieve jig machines and jig machines. Most of the equipment used in the Nantun coal preparation plant was manufactured in the PRC.

Xinglongzhuang Coal Mine

Xinglongzhuang is located in the northern portion of our coalfield, with coalfield area of approximately 59.8 square kilometers. Xinglongzhuang began commercial production in 1986 with a designed annual raw coal production capacity of 3.0 million tonnes. The main coal seam of Xinglongzhuang is concentrated in one leaf with an average thickness of 8.3 meters. As of December 31, 2012, the total in-place proven and probable reserves on the main coal layer were approximately 304.08 million tonnes.

We primarily use the fully mechanized sublevel caving method to extract coal from the coal seam of Xinglongzhuang Coal Mine. At this coal mine, we produced coal from two work faces as of December 31, 2012. The Xinglongzhuang coal preparation plant produces No. 1 and No. 2 Clean Coal and lump coal. The majority of the equipment in the Xinglongzhuang coal preparation plant, including its jig machines and movable-sieve jig machines, was manufactured in the PRC while a small portion of the equipment was imported.

Baodian Coal Mine

Baodian is located in the central western portion of our coalfield, with coalfield area of approximately 36.4 square kilometers. Baodian began commercial production in 1986 with a designed annual raw coal production capacity of 3.0 million tonnes. Certain sections of the main coal seam of Baodian are concentrated in one leaf, with an average thickness of 8.81 meters. The remaining sections are divided into two leaves with an average thickness of 5.74 meters for the upper leaf and 3.38 meters for the lower leaf. As of December 31, 2012, the total in-place proven and probable reserves on the main coal layer were approximately 269.85 million tonnes.

We primarily use the fully mechanized sublevel caving method to extract coal. At this coal mine, we maintained two work faces as of December 31, 2012. The Baodian coal preparation plant produces No. 2 Clean Coal and lump coal. The majority of equipment in the Baodian coal preparation plant, including its slanted wheel, cyclones and jig machines, was manufactured in the PRC.

Dongtan Coal Mine

Dongtan is located in the central eastern portion of our coalfield, with coalfield area of approximately 60.0 square kilometers. Dongtan began commercial production in 1989 with a designed annual raw coal production capacity of 4.0 million tonnes. Certain sections of the main coal seam consist of one layer with an average thickness of 8.41 meters, and the remaining sections are divided into two layers, with an average thickness of 5.38 meters for the upper layer and 3.22 meters for the lower layer. As of December 31, 2012, the main coal layer held approximately 436.94 million tonnes of in-place proven and probable reserves.

We primarily use the fully mechanized sublevel caving method to extract coal. At this mine, we maintained two work faces as of December 31, 2012. The Dongtan coal preparation plant produces No. 2 and No. 3 Clean Coal and lump coal. The principal pieces of equipment in the Dongtan coal preparation plant, including its slanted wheel, cyclones and jig machines, were manufactured in the PRC.

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Jining II Coal Mine

Jining II is located in the northern portion of the Jining coalfield, with coalfield area of approximately 87.1 square kilometers. Jining II began commercial production in 1997 with a designed annual raw coal production capacity of 4.0 million tonnes. Certain sections of the main coal seam of Jining II are concentrated in one layer, with an average thickness of 6.78 meters. The remaining sections are divided into two layers, with an average thickness of 2.1 meters for the upper leaf and an average thickness of 4.68 meters for the lower leaf. As of December 31, 2012, the total in-place proven and probable reserves on the main coal layer were approximately 400.53 million tonnes.

We primarily use the fully mechanized sublevel caving method to extract coal. At this coal mine, we produced coal from two work faces as of December 31, 2012. The main equipment used in Jining II are movable-sieve jig machines and jig machines, most of which were manufactured in the PRC. The principal product of the coal preparation plant of Jining II is No. 2 Clean Coal.

Jining III Coal Mine

Jining III is located in the southern portion of the Jining coalfield and covers an area of 105.0 square kilometers. Jining III has a designed annual raw coal production capacity of 5 million tonnes. Certain sections of the main coal seam of Jining III are concentrated in one layer, with an average thickness of 6.2 meters. The remaining sections are divided into two layers, with an average thickness of 1.21 meters for the upper leaf and an average thickness of 4.9 meters for the lower leaf. As of December 31, 2012, the total in-place proven and probable reserves on the main coal layer were approximately 209.98 million tonnes.

We primarily used the fully mechanized sublevel caving method to extract coal from three work faces in Jining III Coal Mine as of December 31, 2012. The main pieces of equipment used in Jining III are slanted wheel, cyclones and movable-sieve jig machines, which were manufactured in the PRC. The principal products of the coal preparation plant of Jining III are No. 2 and No. 3 Clean Coal. In 2010, Jining III made technical improvements which provided it with washing capacity.

Beisu and Yangcun Coal Mines

The following table sets forth information about Beisu and Yangcun Coal Mines, which are directly owned and operated by the Company:

	Beisu	Yangcun	Total
Background data:
Commencement of construction	1972	1981	N/A
Commencement of commercial production	1976	1988	N/A
Coalfield area (square kilometers)	29.3	27.46	75.38
Reserve data: (as of December 31, 2012)
Mining recovery rate (%)(1)	87.7%	83.3%	N/A
Coal preparation plant recovery rate (%)(2)	N/A	N/A	N/A
Depth of mine (meters underground)	269.7	318.8	N/A
Average thickness of main coal seam (meters)	1.89	10.53	N/A
Type of coal	thermal coal	thermal coal	N/A
Leased/owned	owned	owned	N/A
Assigned/unassigned(3)	assigned	assigned	N/A
Average calorific value (Kcal/kg)	5,302	5,215	N/A
Sulfur content (%)	3.55	1.29	N/A
Production data: (million tonnes)
Designed raw coal production capacity	1.0	1.15	2.15
Designed coal preparation input washing capacity	—	—	—
Raw coal production
2011	—	—	—
2012	1.0	1.1	2.1
Cumulative raw coal production as of December 31, 2012	1.0	1.1	2.1

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(1) The mining recovery rate is the rate of the amount of coal recovered from a determined amount of proven and probable reserves, which is calculated by dividing the actual volume of coal recovered in a year by the volume of proven and probable reserves mined and consumed in the same year.

(2) “Coal preparation plant recovery rate” refers to the wash plant recovery rate of raw coal used during the production of our coal products.

(3) “Assigned” reserves refer to coal reserves which have been committed to a particular mining complex (mine shafts, mining equipment and plant facilities), and all coal which has been leased by the company to others. “Unassigned” reserves refers to coal reserves which have not been committed, and which would require new mine shafts, mining equipment, or plant facilities before operations could begin on the property.

Beisu Coal Mine

Beisu Coal Mine is located in the south portion of our coalfield, and covers an area of approximately 29.3 square kilometers. We acquired the entire assets of Beisu Coal Mine in May 2012.

Beisu Coal Mine commenced operations in 1976 with a designed annual raw coal production capacity of 0.75 million tonnes. The annual raw coal production capacity has been increased to 1.0 million tonnes since 2006. The main coal seam of Beisu is divided into two thin-seam leaves. The thickness of the upper leaf averages 0.9 meters and the thickness of the lower leaf averages 0.99 meters. We primarily used the thin coal seam blasting method and the fully mechanized system to extract coal from three work faces in Beisu Coal Mine as of December 31, 2012. Beisu Coal Mine primarily produces thermal coal. Beisu Coal Mine has a coal preparation plant. The main equipment used in the coal preparation plant is a waste discharge system, which was manufactured in China.

Yangcun Coal Mine

Yangcun Coal Mine is located in the north portion of our coalfield, and covers an area of approximately 27.46 square kilometers. We acquired the entire assets of Yangcun Coal Mine in May 2012.

Yangcun Coal Mine commenced operations in 1988 with a designed annual raw coal production capacity of 0.6 million tonnes. The annual raw coal production capacity has been increased to 1.15 million tonnes since 2006. The main coal seam of Yangcun is divided into three leaves. The thickness of the upper leaf averages 8.34 meters and the thickness of the lower leaves average 1.17 and 1.02 meters. We primarily used the fully mechanized sublevel caving method to extract coal from the upper leaf and the fully mechanized system to extract coal from the lower leaves. As of December 31, 2012, Yangcun Coal Mine has three work faces. Yangcun Coal Mine primarily produces thermal coal. Yangcun Coal Mine does not have any coal preparation plant.

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Coal Mines operated by Shanxi Nenghua and Heze Nenghua

The following table sets forth information about Tianchi Coal Mine and Zhaolou Coal Mine in China that are operated by Shanxi Nenghua and Heze Nenghua:

	Tianchi	Zhaolou	Total
Background data:
Commencement of construction(1)	2004	2009	N/A
Commencement of commercial production(1)	2004	2009	N/A
Coalfield area (square kilometers)	18.7	143.4	162.1
Reserve data: (millions tonnes as of December 31, 2012)
Recoverable reserves(2)	25.7	102.2	127.9
Mining recovery rate(3)(%)	80.4	87.4	N/A
Coal preparation plant recovery rate (%)(4)	N/A	46.08	N/A
Depth of mine (meters underground)	225	905	N/A
Average thickness of main coal seam (meters)	4.6	5.2	N/A
Type of coal	thermal coal	1/3 coking coal	N/A
Leased/owned	owned	owned	N/A
Assigned/unassigned(4)	assigned	assigned	N/A
Average calorific value (Kcal/kg)	4,803	5,806	N/A
Sulfur content (%)	1.09	0.87	N/A
Production data: (million tonnes)
Designed raw coal production capacity	1.2	3.0	4.2
Designed coal preparation input washing capacity	—	3.0	3.0
Raw coal production
2006	0.1	—	0.1
2007	1.2	—	1.2
2008	1.1	—	1.1
2009	1.0	0.04	1.04
2010	1.5	1.6	3.1
2011	1.2	3.0	4.2
2012	1.4	2.7	4.1
Cumulative raw coal production as of December 31, 2012	7.5	7.3	14.8

(1) With respect to the Tianchi Coal Mine, the “commencement of construction” refers to capacity expansion and technology upgrade undertaken after our 2006 acquisition; the “commencement of commercial production” refers to the resumption of production after completion of the foregoing expansion and upgrade.

(2) The recoverable reserves of the above coal mines are based on the report prepared by Minarco Asia Pacific Pty Limited in May 2006 in accordance with the standards in the JORC Code.

“Recoverable reserves” generally refer to proved and probable reserves under the JORC Code as revised in 2004,. “Proved reserves” are the economically mineable part of a measured coal resource and “probable reserves” are the economically mineable part of an indicated, and in some circumstances, measured coal resource. Both “proved reserves” and “probable reserves” incorporate mining dilution and allow for mining losses and are based on an appropriate level of mine planning, mine design and scheduling.

(3) The mining recovery rate is the rate of the amount of coal recovered from a determined amount of proven and probable reserves, which is calculated by dividing the actual volume of coal recovered in a year by the volume of proven and probable reserves mined and consumed in the same year.

(4) “Coal preparation plant recovery rate” refers to the wash plant recovery rate of raw coal used during the production of our coal products.

(5) “Assigned” refer to coal reserves which have been committed to a particular mining complex (mine shafts, mining equipment and plant facilities), and all coal which has been leased by the company to others. “Unassigned” refers to coal reserves which has not been committed, and which would require new mine shafts, mining equipment, or plant facilities before operations could begin on the property.

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Tianchi Coal Mine

Tianchi Coal Mine is an underground mine located in Heshun County of Shanxi, with an area of approximately 18.7 square kilometers. Tianchi Coal Mine commenced commercial production in 2006 and the designed production capacity was increased to 1.2 million tonnes per annum in the same year. Tianchi Coal Mine is operated by inclined shaft development and primarily produces thermal coal. The average thickness of the target coal seam is 4.6 meters. As of December 31, 2012, the total recoverable reserves of Tianchi Coal Mine were approximately 25.7 million tonnes.

We primarily used the longwall caving mining method to extract coal from one work face at Tianchi Coal Mine as of December 31, 2012. The primary piece of equipment in this system is a slanted wheel, which was manufactured in China. The operations at Tianchi Coal Mine are powered by electricity from local power grids. We ship coal products from the Tianchi Coal Mine to Hebei and surrounding areas on the Yangshe Railway and the national railway network, as well as the highway network.

Zhaolou Coal Mine

Zhaolou Coal Mine is an underground longwall mine located in the central portion of Juye Coal Field in Shandong. Zhaolou Coal Mine covers an area of approximately 143.4 square kilometers, and is accessible by roadway and railway.

Zhaolou Coal Mine commenced commercial production in December 2009 and has a designed annual raw coal production capacity of 3.0 million tonnes. Zhaolou Coal Mine produces 1/3 coking coal. The average thickness of the main coal seam of Zhaolou Coal Mine is 5.2 meters. The total recoverable reserves of Zhaolou Coal Mine were approximately 102.2 million tonnes as of December 31, 2012, which was net of coal preparation and plant recovery losses.

We primarily used the longwall caving mining method to extract coal from the two work faces at Zhaolou Coal Mine as of December 31, 2012. The coal preparation plant at Zhaolou Coal Mine commenced commercial production in September 2009. The main equipment used in the coal preparation plant was a slanted wheel, cyclone machines and TBS separators, which were mainly produced in China. The main product of Zhaolou’s coal preparation plant is No. 2 Clean Coal. The operations at Zhaolou Coal Mine are powered by electricity from local power grids. We ship coal products to Shandong and Hebei Provinces and surrounding areas by truck.

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Coal Mines operated by Ordos Neng Hua

The following table sets forth information about Anyuan Coal Mine and Wenyu Coal Mine in China that are operated by Ordos Neng Hua:

	Anyuan	Wenyu	Total
Background data:
Commencement of construction	—	1996	N/A
Commencement of commercial production	2004	1997	N/A
Coalfield area (square kilometers)	9.26	9.36	75.38
Reserve data: (as of December 31, 2012)
Mining recovery rate (%)(1)	88.4	88.7	N/A
Coal preparation plant recovery rate (%)(2)	N/A	N/A	N/A
Depth of mine (meters underground)	68	59	N/A
Average thickness of main coal seam (meters)	2.8	3.9	N/A
Type of coal	thermal coal	thermal coal	N/A
Leased/owned	owned	owned	N/A
Assigned/unassigned(3)	assigned	assigned	N/A
Average calorific value (Kcal/kg)	5,309	2,237	N/A
Sulfur content (%)	0.32	0.75	N/A
Production data: (million tonnes)
Designed raw coal production capacity	1.2	3.0	6.35
Designed coal preparation input washing capacity	—	—	—
Raw coal production
2011	2.3	2.1	4.4
2012	2.3	4.6	6.9
Cumulative raw coal production as of December 31, 2012	4.6	6.7	11.3

(1) The mining recovery rate is the rate of the amount of coal recovered from a determined amount of proven and probable reserves, which is calculated by dividing the actual volume of coal recovered in a year by the volume of proven and probable reserves mined and consumed in the same year.

(2) “Coal preparation plant recovery rate” refers to the wash plant recovery rate of raw coal used during the production of our coal products.

(3) “Assigned” reserves refer to coal reserves which have been committed to a particular mining complex (mine shafts, mining equipment and plant facilities), and all coal which has been leased by the company to others. “Unassigned” reserves refers to coal reserves which have not been committed, and which would require new mine shafts, mining equipment, or plant facilities before operations could begin on the property.

Anyuan Coal Mine

Through Ordos Neng Hua, we wholly control Anyuan Coal Mine, which is located in Yijinhuoluoqi of Ordos City in Inner Mongolia Autonomous Region, and covers an area of approximately 9.3 square kilometers. Ordos Neng Hua commenced commercial production in 2011.

In 2011, we increased the annual production capacity of Anyuan Coal Mine from the designed annual production capacity of 600,000 tonnes to 1.2 million tonnes through reconstruction and expansion. Anyuan Coal Mine primarily produces thermal coal. The average thickness of the main coal seam of Anyuan Coal Mine is 2.8 meters. We principally extracted coal from one work face at Anyuan Coal Mine as of December 31, 2012. Anyuan Coal Mine has a coal separation system. Anyuan Coal Mine is located in close proximity to railway and road transportation. The provincial highway and Baoshen railway are located approximately six kilometers to the west of the coalfield.

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Wenyu Coal Mine

Through our subsidiary, Inner Mongolia Xintai, we operate Wenyu Coal Mine, which is located in Ordos City in Inner Mongolia Autonomous Region, and covers an area of approximately 9.36 square kilometers.

The original designed annual raw coal production capacity of Wenyu Coal Mine was 1.1 million tonnes. We completed production capacity expansion from 1.1 million tonnes to 3.0 million tonnes upon approvals from the relevant administrative authority and commenced commercial production in 2011. The average thickness of the main seam of Wenyu Coal Mine is 4.0 meters. The type of coal is thermal coal. We principally extracted coal from two work faces at Wenyu Coal Mine as of December 31, 2012. Wenyu Coal Mine has a simplified coal separation system. Wenyu Coal Mine is located in close proximity to Baofu road, Anyuan Coal Mine and railway transportation.

Coal Mines operated by Yancoal Australia

The following table sets forth information about our operational coal mines in Australia, which are directly or indirectly held by Yancoal Australia:

	Austar	Yarrabee	Ashton	Moolarben	Gloucester Mine	Donaldson Mine	Middlemount(6)	Total
Background data:
Commencement of construction(1)	1998	1981	2003	2009	1998	2001	2009	N/A
Commencement of commercial production(1)	2000	1982	2004	2010	1999	2001	2011	N/A
Coalfield area(2) (square kilometers)	63	62.7	19.2	17.4	20.5	42.3	27.7	252.8
Reserve data: (millions of tonnes as of December 31, 2012)
Recoverable reserves(3)	49.7	61.4	74.0	300.9	69.4	148.3	96.0	799.7
Depth of mine (4) (meters underground)	300-700	N/A	190-280	N/A	N/A	50-150	N/A	N/A
Type of coal	semi-hard coking coal	PCI coal	semi-soft coking coal	thermal coal	semi-hard coking coal	semi-soft coking coal	Coking coal PCI coal	N/A
Leased/owned	owned	owned	owned	owned	owned	owned	owned	N/A
Assigned/unassigned (5)	assigned	assigned	assigned	assigned	assigned	assigned	assigned	N/A
Average calorific value (Kcal/kg)	6196	7300	7100	6650	7550	8200	7300	N/A
Sulfur content (%)	1.75	0.7	0.65	0.5	1.05	0.90	0.5	N/A
Production data: (million tonnes)
Designed raw coal production capacity	3.6	3.0	5.2	16.0	3.8	3.0	5.25	34.6
Designed coal preparation input washing capacity	3.3	2.4	6.5	16.0	3.8	3.0	5.25	30.0
Raw coal production
2006	0.4	—	—	—	—	—	—	0.4
2007	1.6	—	—	—	—	—	—	1.6
2008	1.9	—	—	—	—	—	—	1.9
2009	1.9	—	—	—	—	—	—	1.9
2010	1.7	2.3	2.7	3.9	—	—	—	10.6
2011	1.9	3.1	1.7	5.6	—	—	—	12.3
2012	1.7	3.2	2.3	7.2	1.8	2.0	—	18.2
Cumulative raw coal production as of December 31, 2012	11.1	8.6	6.7	16.7	1.8	2.0	—	46.9

(1) The Austar Coal Mine was closed in 2003 as the result of an underground fire. We acquired Austar Coal Mine in 2004 and implemented a production expansion and technology upgrade in 2005. Austar Coal Mine resumed part of its operations in October 2006. Each of the Ashton Coal Mine and Moolarben Coal Mine has an open-pit coal mine and an underground coal mine. The “commencement of commercial production” indicates the time when the open-pit mines, the earlier of the two types of mines, commenced commercial production.

(2) The coalfield area refers to the area of current leased land for mining, excluding the area on which we own prospecting rights. The coalfield area of Harry-Brandt refers to the area on which we own prospecting rights.

(3) The recoverable reserves of the above coal mines are based on the report prepared by the competent persons appointed by Yancoal Australia or Yancoal Resources and other companies which have been acquired by Yancoal Australia and such reserves refer to total proved and probable reserves that were prepared in accordance with the standards in the JORC Code.

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(4) Ashton Coal Mine has both open-pit and underground coal mines. The depth of mine indicates the depth of the underground mines.

(5) “Assigned” refers to coal reserves which have been committed to a particular mining complex (mine shafts, mining equipment and plant facilities), and all coal which has been leased by the company to others. “Unassigned” refers to coal reserves which have not been committed, and which would require new mine shafts, mining equipment, or plant facilities before operations could begin on the property.

(6) As Middlemount Coal Mine is owned and operated by a joint venture jointly controlled by Yancoal Australia and a third party, its production data and financial performance will not be consolidated in to our reports.

Austar Coal Mine

Austar Coal Mine is an underground mine located in Hunter Valley, New South Wales, Australia and is accessible by railway. Austar Coal Mine covers an area of 63.0 square kilometers. Austar Coal Mine was constructed in 1998 and commenced commercial production in 2000.

In 2003, an underground fire occurred at Austar Coal Mine when it was still owned by Southland Coal Pty Limited, resulting in the closure of the mine. On December 24, 2004, we acquired the entire interest in the Austar Coal Mine for approximately A$32.0 million from Southland Coal Pty Limited, an independent third party. After we invested approximately A$230.3 million in the reconstruction, capacity expansion and technology upgrade of Austar Coal Mine in 2005, which included funding for equipment and machinery, the mine resumed commercial production of semi-hard coking coal in October 2006.

The average thickness of the main coal seam of Austar Coal Mine is 6.5 meters. As of December 31, 2012, the mine’s JORC-compliant reserves were approximately 49.7 million tonnes. As of the same date, the mine’s marketable coal reserves, representing beneficiated or otherwise enhanced coal products where modifications resulting from mining, dilution and processing have been considered, were approximately 39.6 million tonnes.

We principally use the fully mechanized longwall top coal caving mining method to extract coal from the underground mine. The main equipment used in the coal handling preparation plant consists of coal crushing equipment, cyclones and other associated equipment which were generally manufactured in Australia. The operations at Austar Coal Mine are powered by electricity from local power grids. We transport coal products from Austar Coal Mine to Newcastle Port via railway.

Yarrabee Coal Mine

Yarrabee Coal Mine is an open-pit mine located in Bowen Basin, Queensland, Australia and is accessible by railway to the Gladstone Port. Yarrabee Coal Mine covers an area of 62.7 square kilometers. The construction of Yarrabee Coal Mine started in 1981 and commercial production commenced in 1982.

Through Yancoal Resources, Yancoal Australia wholly owns Yarrabee Coal Mine. Currently, the designed annual capacity of Yarrabee Coal Mine is approximately 3.2 million tonnes. Yarrabee Coal Mine mainly produces low volatility PCI coal.

The thickness of the main coal seam of Yarrabee Coal Mine ranges from 3.2 to 4 meters. As of December 31, 2012, the mine’s JORC-compliant reserves were approximately 61.4 million tonnes. As of the same date, the mine’s marketable coal reserves were approximately 49.4 million tonnes. We utilize conventional truck shovel and open-pit mining methods to extract coal at Yarrabee Coal Mine.

Yarrabee Coal Mine has a coal preparation plant. The main pieces of equipment used in the coal preparation plant are heavy medium cyclone machines and floating separation machines, which were generally manufactured in Australia. The operations at Yarrabee Coal Mine are powered by electricity from local power grids. We transport coal products from Yarrabee Coal Mine to Gladstone Port via railway.

Ashton Coal Mine

Ashton Coal Mine consists of an underground mine and an open-pit mine located in Hunter Valley, New South Wales, Australia and is accessible by railway to Newcastle Port. Ashton Coal Mine covers an area of approximately 19.2 square kilometers. The construction of the open-pit and underground mines of Ashton Coal Mine started in 2003 and commercial production commenced in 2004.

The designed annual capacity of Ashton Coal Mine is approximately 5.2 million tonnes of coal. Ashton Coal Mine mainly produces semi-soft coking coal.

The thickness of the main coal seams of the open-pit mine and the underground mine of Ashton Coal Mine ranges from 2.14 to 2.26 meters and 1.7 to 2.4 meters, respectively. As of December 31, 2012, the mine’s JORC-compliant reserves were approximately 74.0 million tonnes. As of the same date, the mine’s marketable coal reserves were approximately 44.5 million tonnes, according to our internal estimates. We principally use longwall operations to extract coal from the underground coal seam and use conventional truck shovel mining methods at the open-pit mine of Ashton Coal Mine.

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The main pieces of equipment used in the coal preparation plant of Ashton Coal Mine are heavy-medium cyclone machines and floating separation machines, which were generally manufactured in Australia. The operations at Ashton Coal Mine are powered by electricity from local power grids. We transport coal products from Ashton Coal Mine to Newcastle Port via railway.

Moolarben Coal Mine

Moolarben Coal Mine consists of an open-pit mine and an underground development project and is located near Mudgee in central western New South Wales. It is connected by railway to Newcastle Port. Moolarben Coal Mine covers an area of 17.4 square kilometers. Construction of the open-pit mine commenced in 2009 with commercial production starting in mid-2010. The construction of the underground mine at Moolarben is expected to commence in the second half of 2013.

Yancoal Australia holds 80% of the equity interest in Moolarben Coal Mine through its subsidiary, Moolarben Coal Mines Pty Limited. The designed annual capacity of Moolarben Coal Mine is approximately 17.0 million tonnes, of which the annual capacity of the underground mine is expected to be approximately 4.0 million tonnes and the annual capacity of the open-pit mine is approximately 13.0 million tonnes. Moolarben Coal Mine produces thermal coal.

The average thickness of the main coal seam of the open-pit mine of Moolarben Coal Mine is 5.5 to 11.66 meters. As of December 31, 2012, the mine’s JORC-compliant reserves were approximately 300.9 million tonnes. As of the same date, the mine’s marketable coal reserves were approximately 225.0 million tonnes. We use conventional truck shovel mining methods in the open-pit mine and expect to use longwall machines to extract coal in the underground mine project.

Moolarben Coal Mine has a coal handling preparation plant with a capacity of approximately 1,800 TPH, and utilizes conventional equipment including medium-heavy cyclones and flotation cells which are primarily manufactured in Australia. The operations at Moolarben Coal Mine are powered by electricity from local power grids. We transport thermal coal products from Moolarben Coal Mine to Newcastle Port via railway.

Gloucester Coal Mine

Gloucester Coal Mine is located in Gloucester basin in New South Wales, Australia and covers an area of 20.5 square kilometres. Gloucester Coal Mine is approximately 100 kilometers away from Newcastle Port. The construction of Gloucester Coal Mine started in 1998 and commercial production commenced in 1999.

Gloucester Coal Mine consists of two open-pit mines, Duralie and Stratford, which has an aggregate annual designed production capacity of 3.8 million tonnes and an aggregate annual designed preparation capacity of 3.8 million tonnes. As of December 31, 2012, Gloucester Coal Mine’s JORC-compliant reserves were approximately 69.4 million tonnes. As of the same date, the mine’s marketable coal reserves were approximately 40.0 million tonnes.

Duralie open-pit mine and Stratford open-pit mine own one coal preparation plan with an annual designed preparation capacity of 1.8 million tonnes, which was increased to 4.3 million tonnes in June 2011. We transport our coal products from Gloucester Coal Mine via railway.

Donaldson Coal Mine

Donaldson Coal Mine is located in Newcastle coal field in New South Wales, Australia and covers an area of 42.3 square kilometres. Donaldson Coal Mine is approximately 25 kilometers away from Newcastle Port. The construction of Donaldson Coal Mine started in 2001 and commercial production commenced in the same year.

Donaldson Coal Mine consists of one open-pit coal mine, Donaldson open-pit mine and two underground coal mines, Abel and Tasman underground mines, which has an aggregate annual designed production capacity of 3.0 million tonnes. As of December 31, 2012, Donaldson Coal Mine’s JORC-compliant reserves were approximately 148.3 million tonnes. As of the same date, the mine’s marketable coal reserves were approximately 90.5 million tonnes.

Our coal products at Donaldson Coal Mine are prepared by a coal preparation plant owned and operated by a third party with coal preparation capacity of 3.0 million tonnes per year. We transport our coal products from Donaldson Coal Mine via railway.

Middlemount Coal Mine

Middlemount Coal Mine is located at Bowen Basin in Queensland, Australia and covers an area of 27.7 square kilometres. The mine is approximately 300 kilometres away from Abbot Point port. The construction of Middlemount Coal Mine started in 2009 and commercial production commenced in 2011. Through Yancoal Australia, we own approximately 50% of the equity interest in the joint venture owns and operates Middlemount Coal Mine.

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As of December 31, 2012, Middlemount Coal Mine’s JORC-compliant reserves were approximately 96 million tonnes. As of the same date, the mine’s marketable coal reserves were approximately 69.1 million tonnes. The mine has an annual designed production capacity of 5.4 million tonnes. We use conventional open-pit mining methods to extract coal at Middlemount open-pit mine Middlemount Coal Mine primarily produces coking coal and PCI coal. Middlemount Coal Mine has a coal preparation plant with an annual capacity of 5.25 million tonnes. The main pieces of equipment used in the coal preparation plant are screw machines with flotation devices. We transport our coal products from Middlemount Coal Mine via railway.

Coal Mines operated by Yancoal International

The following table sets forth information about our operational coal mines in Australia, which are directly or indirectly held by Yancoal International (Holding):

	Cameby Downs	Premier	Total
Background data:
Commencement of construction	2009	1996	N/A
Commencement of commercial production	2010	1996	N/A
Coalfield area(1) (square kilometers)	27.2	141.8	169.0
Reserve data: (millions of tonnes as of December 31, 2012)
Recoverable reserves(2)	434.0	156.2	590.2
Depth of mine (meters underground)	N/A	N/A	N/A
Type of coal	thermal coal	thermal coal	N/A
Leased/owned	owned	owned	N/A
Assigned/unassigned(3)	assigned	assigned	N/A
Average calorific value (Kcal/kg)	6000	4776	N/A
Sulfur content (%)	0.47	0.6	N/A
Production data: (million tonnes)
Designed raw coal production capacity	1.80	5.0	6.8
Designed coal preparation input washing capacity	1.8	N/A	1.8
Raw coal production
2011	0.8	—	0.8
2012	1.9	4.2	6.1
Cumulative raw coal production as of December 31, 2012	2.7	4.2	6.9

(1) The coalfield area refers to the area of current leased land for mining, excluding the area on which we own prospecting rights. The coalfield area of Harry-Brandt refers to the area on which we own prospecting rights.

(2) The recoverable reserves of the above coal mines are based on the report prepared by the competent persons appointed by Yancoal Australia or Yancoal Resources and other companies which have been acquired by Yancoal Australia and such reserves refer to total proved and probable reserves that were prepared in accordance with the standards in the JORC Code.

(3) “Assigned” refers to coal reserves which have been committed to a particular mining complex (mine shafts, mining equipment and plant facilities), and all coal which has been leased by the company to others. “Unassigned” refers to coal reserves which have not been committed, and which would require new mine shafts, mining equipment, or plant facilities before operations could begin on the property.

Cameby Downs Coal Mine

Cameby Downs Coal Mine consists of an open-pit mine located near Chinchilla in Southwest Queensland. The mine covers an area of approximately 27.2 square kilometers. The construction of the mine commenced in 2009 and commercial production started in late 2010. Yancoal Australia owns 100% of Cameby Downs Coal Mine. Cameby Downs Mine produces thermal coal and the average thickness of Cameby Downs Coal Mine was 4 meters. As of December 31, 2012, Cameby Downs Coal Mine had JORC-compliant reserves of approximately 434.0 million tonnes. As of the same date, the mine’s marketable coal reserves were approximately 277.0 million tonnes.

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The phase one stage of Cameby Downs Coal Mine has raw coal annual production capacity of 1.8 million tonnes and product capacity of approximately 1.4 million tonnes product coal. We intend to increase annual raw coal annual production capacity to approximately 16 million tonnes and annual commercial coal production capacity to approximately 11.4 million tonnes subject to positive feasibility studies and obtaining port allocation through the construction of the phase II at Cameby Downs Coal Mine in the future.

Cameby Downs Coal Mine has a coal handling preparation plant with an annual capacity of approximately 220 TPH, and utilizes medium-heavy cyclones and flotation cells which are primarily manufactured in Australia. The operations at the mine are powered by electricity from the local power grid. We transport coal products from Cameby Downs Coal Mine to Brisbane Port via railway.

Premier Coal Mine

Premier Coal Mine, located in Perth, is an open-pit coal mine covering an area of approximately 141.8 square kilometers. The construction of the mine began in 1996 and commercial production commenced in the same year. Yancoal International (Holding) indirectly wholly owns Premier Coal Mine. The annual production capacity of Premier Coal Mine is approximately 5.0 million tonnes. Premier Coal Mine primarily produces low ash and low sulfur sub-bituminous coal. As of December 31, 2012, Premier Coal Mine had JORC-compliant reserves of approximately 1.562 million tonnes. We utilize conventional truck shovel open-pit mining methods to mine the coal from a number of seams at the mine. The coal mined at Premier Coal Mine is crushed and sold without washing. As a result, the mine’s marketable coal were approximately 156.2 million tonnes as of December 31, 2012, the same amount as its JORC-compliant reserves.

The operations at Premier Coal Mine are powered by electricity from local power grids. We entered into a long-term coal sales agreement with Verve Energy, a power generator owned by the Western Australian Government. We transport coal products from Premier Coal Mine by conveyors to power stations and by railway to other customers in Australia.

Mining and Exploration Rights

Nantun, Xinglongzhuang, Baodian, Dongtan and Jining II

According to the approvals from the State-owned Asset Supervision Department and the Coal Industry Supervision Department obtained at the establishment of the Company, and the Mining Agreement entered into between the Yankuang Group and us in 1997 and its supplemental agreement, we undertook to make ten annual payments of approximately RMB13.0 million to the Yankuang Group commencing in 1997, as compensation for the depletion of coal resources at the Nantun, Xinglongzhuang, Baodian, Dongtan and Jining II coal mines. We fulfilled this obligation in 2007 after we made the final installment payment and we are not obligated to make further payment under this arrangement.

In September 2006, the State Council approved the Implementation Plan for the Compensation System Reform Testing in Relation to Deepening Coal Resources, jointly promulgated by the Ministry of Finance of the PRC, Ministry of Land and Resources of the PRC and the NDRC (the “Implementation Plan”). According to the Implementation Plan, enterprises that obtain mining rights as a result of state-funded exploration must pay mining right fees based on the valuation of its reserves. Our operations in Shandong Province are subject to this mining right fee. On August 3, 2012, Jining Municipal Land and Resources Bureau issued the Notice of payment for mining rights by Yanzhou Coal Mining Company Limited [JiGuotuzi(2012) No. 212], pursuant to which we are required to pay a consideration of RMB2,476.78 million for the mining rights of Nantun, Xinglongzhuang, Baodian, Dongtan and Jining II coal mines, RMB495.4 million of which was paid before the due date of September 30, 2012. The consideration was determined based on the assessment report for the consideration of mining rights of these five coal mines issued by independent third parties appointed by Jining Municipal Land and Resources Bureau and filed with Shandong Provincial Department of Land and Resources. For the year ended December 31, 2012, we paid mining rights compensation fees of approximately RMB495.4 million. We are required to pay an additional RMB396.3 million in 2013.

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Jining III Coal Mine

Pursuant to the Jining III Coal Mine Acquisition Agreement dated August 4, 2000 that we entered into with the Yankuang Group, the consideration for the mining right of Jining III Coal Mine was approximately RMB132.5 million, which was to be paid to the Yankuang Group in ten equal interest-free annual installments commencing in 2001. We fully paid the consideration for the mining rights of Jining III Coal Mine in 2010.

Austar Coal Mine

We obtained an exploration license for Austar Coal Mine from the New South Wales Department of Primary Industries in 2005. Pursuant to the underlying Asset Sale Agreement, we paid A$32.0 million to the receivers of Gympie Gold for the mine after we obtained the exploration license to the new exploration site adjacent to the Austar Coal Mine in 2006.

Tianchi Coal Mine

We acquired Shanxi Nenghua for RMB748.3 million, of which RMB136.6 million was consideration for the mining rights of Tianchi Coal Mine.

Zhaolou Coal Mine

We purchased the mining rights of Zhaolou Coal Mine for a consideration of RMB747.3 million in 2008.

Anyuan Coal Mine

We acquired the entire equity interest in Anyuan Coal Mine for a consideration of approximately RMB143.5 million in November 2010. The fair market value of the mining rights for Anyuan Coal Mine was approximately RMB131.3 million as of October 31, 2010. As of the date of this annual report, we were in the process of obtaining of the approval, permit and registration of the acquisition of Anyuan Coal Mine, and have confirmed with the relevant mining authorities that our approval, permit and registration of Anyuan Coal Mine is pending regulatory review. Despite the outstanding approvals and lack of mining license, we have received confirmation from the relevant mining authorities to continue our coal mining operations at Anyuan Coal Mine. Until we receive such approvals, we are prohibited from transferring or disposing of this mine. As of the date of this annual report, we are not aware of any pending administrative action, fines or penalties for the continued operation of Anyuan Coal Mine.

Wenyu Coal Mine

In July 2011, Ordos Neng Hua acquired 80% of the equity interest in Inner Mongolia Xintai, which operates Wenyu Coal Mine, for a consideration of RMB2,801.6 million.

Zhuanlongwan Coalfield

Ordos Neng Hua won the bid for the mining rights of Zhuanlongwan coalfield of Dongsheng Coal Field in Inner Mongolia Autonomous Region for a consideration of RMB7,878.7 million on January 28, 2011. As of the date of this annual report, Ordos Neng Hua had paid the total consideration of RMB5,538.7 million and had RMB2,340.0 million pending. We obtained the approval from NDRC for the preliminary work of Zhuanlongwan Project in March 2013, and the approval, production permit and registration of the mining rights to Zhuanlongwan Project are still in progress.

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Yangcun and Beisu Coal Mine

We acquired the entire assets of Beisu and Yangcun Coal Mines from Yancoal Group and Beisu Company in 2012 for a consideration of RMB824.1 million. According to an evaluation report issued by an independent evaluator, the fair market value of the mining rights of Beisu Coal Mine and Yangcun Coal Mine was RMB139.5 million and RMB343.2 million as of August 31, 2011.

Coal Mines Owned by Yancoal Resources

We acquired the entire equity interest in Felix, a wholly owned subsidiary of Yancoal Australia, for A$3,333 million in 2009. The fair market value of our attributable reserves and attributable resources was A$2,845.2 million as of December 23, 2009. The acquisition included all mining rights to the coal mines owned by Felix (now Yancoal Resources), environment protection licenses, exploration licenses and mining leases.

Yancoal Resources sold 51% of the equity interest in Minerva Coal Joint Venture to Sojitz Coal Resources Pty Ltd, an independent third party on December 30, 2010. The value of the equity interest sold by Yancoal Resources was estimated to be between approximately A$188.0 million to A$201.0 million, according to an evaluation report issued by an independent evaluator dated September 9, 2010.

In 2011, through Yancoal Resources, Yancoal Australia acquired 30% of the equity interest in the Ashton Coal Mine Joint Venture originally held by Austral-Asia Coal Holdings Pty Ltd., a wholly owned subsidiary of Singapore IMC Group, for a consideration of US$250 million. According to an evaluation report issued by an independent evaluator dated January 20, 2012, 30% of the equity interest Ashton Coal Mine Joint Venture was valued at approximately A$230.0 million. The remaining 10% interest is held by ICRA Ashton Pty Ltd., a wholly owned subsidiary of Itochu Coal Resources Australia Pty Ltd.

Cameby Downs Coal Mine

We acquired Cameby Downs Coal Mine and Syntech’s exploration tenements through the acquisition of the entire equity interest in Syntech Resources Pty Ltd. and Syntech Holdings II Pty Ltd., for a consideration of A$208.4 million on August 1, 2011. In addition to the Cameby Downs Coal Mine, Syntech Resources Pty Ltd. and Syntech Holdings II Pty Ltd. also have five exploration tenements that might be potentially developed. According to an evaluation report issued by an independent evaluator dated February 14, 2012, the fair market value of the reserves, resources and mining rights of the five exploration tenements was A$65.8 million as of August 1, 2011. Currently, the Syntech project is the phase I of Cameby Downs Coal Mine operation.

Premier Coal Mine and Wilga Exploration Area

We acquired the Premier Coal Mine and the Wilga Exploration Area through the acquisition of Premier Coal Limited (then called Wesfarmers Premier Coal Limited) and Premier Char Ltd. (then called Wesfarmers Char Pty Ltd.), for a consideration of A$313.5 million in September 2011. The fair market value of the reserves, resources and mining rights of the coal mines owned by Premier Coal Limited was A$49.9 million as of December 31, 2011, according to an evaluation report issued by an independent evaluator.

Coal Mines Owned by Gloucester

Yancoal Australia completed its merger with Gloucester in June 2012. According to an evaluation report issued by an independent evaluator, the fair market value of the reserves, resources and mining rights of the coal mines owned by Gloucester was A$1,216.9 million as of June 30, 2012.

Potash Mineral Exploration Permits in Canada

We acquired 11 potash mineral exploration permits from Devonian Potash Inc. and eight potash mineral exploration permits from North Atlantic Potash Inc. for a total consideration of US$260 million in September 2011. The 19 potash mineral exploration permits cover an aggregate area of approximately 5,363.84 square kilometers in Saskatchewan, Canada. According to the preliminary exploration report, we expect that the permitted area may have abundant potash resources. We intend to conduct further in-depth exploration work to produce formal estimates of potash resources in compliance with internationally recognized reporting standards.

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Railway Assets

We own and operate a railway transportation network that connects our coal mines in Shandong to the national railway system and Zouxian Power Plant in Jining City of Shandong. As of the date of this annual report, our railway network spans a total length of approximately 204 kilometers. Our railway network provides us with substantial control over a major means of transportation for our key product, allowing us to benefit from the synergies from coal production, sales and transportation.

Methanol and Cogeneration Power Plants

Yulin Nenghua. Yulin Nenghua, located in Yunlin City of Shanxi, operates a 600,000-tonne methanol plant and a supporting power plant. The primary pieces of equipment at the methanol plant include boilers, steam turbines, air compressors and booster set, GEA air-cooler exchangers, gasifiers and gasification compressors, synthetic compressors, a methanol synthetic gas-cooled reactor, a methanol synthetic water-cooled reactor and propylene refrigeration compressors. Yulin Nenghua also operates a supporting power plant with an installed capacity of 60 MW for its methanol production.

Tianhao Chemicals. Tianhao Chemicals, located in Xiaoyi City of Shanxi, operates a 100,000-tonne methanol plant and a supporting power plant. The primary pieces of equipment at the methanol plant include low pressure wet type spiral gas cabinets, coke oven gas compressors, reformers and converters. At the 2012 first extraordinary general meeting of Tianhao Chemicals, the shareholders approved public sale of the methanol assets. According to Shandong Zhongxin Assets Appraisal Co., Ltd., the valuation of Tianhao Chemicals’ assets was RMB268 million as of April 30, 2012. The transaction is currently under the selling procedure on the Shandong Property Right Exchange Center. Tianhao Chemicals also operates a supporting power plant with an installed capacity of 24 MW for its methanol production.

Hua Ju Energy. Hua Ju Energy is headquartered in Zoucheng City, Shandong. Hua Ju Energy owns and operates six cogeneration power plants, each of which is able to supply electric power and heat to our coal mines in its proximity. The power plants consist of the Nantun power plant, Xinglongzhuang power plant, Baodian power plant, Dongtan power plant, Jining II power plant and Jidongxincun power plant. The aggregate installed capacity of these six power plants is 144 MW and the annual power generation capacity and heat supply capacity are 1.0 to 1.1 billion KWh and 1.0 to 1.2 million steam tonnes, respectively. The main pieces of equipment used at Hua Ju Energy include energy conversion CFB boilers and extraction and condensing steam turbines.

Zhaolou Coal Mine Power Plants. Zhaolou Coal Mine power plants are intended to be integrated power plants for Zhaolou Coal Mine, located in Heze City of Shandong. The power plants are being constructed in two phases with designed capacity of 300 MW for each phase. We commenced construction of phase I of the power plants which utilize a power generator of 300 MW and a circulating fluidized-bed boiler with capacity of 1,025 tonnes per hour in March 2010. The main pieces of equipment used at Zhaolou Coal Mine power plants include extraction and condensing steam turbines, water hydrogen generators and CFB boilers.

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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion and analysis should be read in conjunction with the information set forth in our consolidated financial statements, together with the related notes, included in this annual report.

A. Operating Results

During the period covered by this annual report, our five business segments consist of our:

• coal business;

• railway transportation business;

• coal chemical business;

• electric power business; and

• heat supply business.

Overview

Coal Business

We are one of the primary coal producers in China and Australia. We primarily engage in the mining, washing, processing and distribution of coal through railway transportation. We offer a wide variety of coal products including thermal coal, semi-hard coking coal, semi-soft coking coal, PCI coal and mixed coal products which are sold to power plants, metallurgical mills, chemical manufacturers and fuel trading companies in China and multiple other countries, including Japan, South Korea and Australia. Since 2004, we have expanded our operations to include railway transportation, production of coal chemicals, the generation of electricity and heat and the potash exploration business.

Our invoiced amount of coal sold includes returns, discounts, sales-related taxes, port fees and other fees and, in certain cases, transportation costs payable by customers. Gross sales, or sales income as used elsewhere in this annual report, of coal equals the invoiced amount of coal sold less returns and discounts. In 2012, we produced approximately 67.8 million tonnes of raw coal and sold approximately 94.1 million tonnes of coal, which included approximately 32.2 million tonnes of coal that was purchased externally from third parties for trading. In 2010, 2011 and 2012 our sales income of coal was approximately RMB32,590.9 million, RMB45,181.2 million and RMB56,200.6 million, respectively, which represented approximately 96.0%, 96.0% and 96.7%, respectively, of our total sales income. Domestic sales income of coal accounted for 83.9%, 80.7% and 82.9% and overseas sales income of coal accounted for 16.1%, 19.3% and 17.1% of our total sales income of coal during 2010, 2011 and 2012, respectively.

Railway Transportation Business

We own a railway network spanning over 200 kilometers, which we use primarily to transport coal, as well as other goods upon the request of our railway transportation customers. To facilitate our production and sales of coal, we provide railway transportation services to our coal customers and the Yankuang Group. The annual transport volume on our railway network has remained steady in recent years. In 2012, we transported a total of approximately 17.5 million tonnes of goods on our railway network, compared to approximately 18.1 million tonnes in 2011 and approximately 19.7 million tonnes in 2010.

We derive income from our railway transportation services through the delivery of (i) coal purchased from us on an ex-mine basis, an arrangement where customers separately bear the cost of transporting the coal they purchase to a designated location, and (ii) goods other than coal that we deliver on behalf of customers who engage us exclusively for our railway transportation services. In 2012, income from our railway transportation services totaled approximately RMB464.1 million.

Coal Chemical Business

Our coal chemical operations consist primarily of the production and sale of methanol. Prior to April 2012, we had two subsidiaries engaged in methanol operations: Yulin Nenghua and Shanxi Nenghua. Shanxi Nenghua ceased production in April 2012 due to a shortage in supply of raw materials. Yulin Nenghua’s methanol plant, which has a production capacity of 600,000 tonnes per annum, commenced commercial operations in August 2009. In 2010, Yulin Nenghua produced 311,000 tonnes and sold 319,000 tonnes of methanol (including inventory from the prior year), generating sales income of approximately RMB523.5 million. In 2011, Yulin Nenghua and Shanxi Nenghua (through its wholly owned subsidiary Tianhao Chemicals) produced a total of approximately 532,000 tonnes and sold 529,000 tonnes of methanol, generating sales income of approximately RMB1,059.3 million. In 2012, Yulin Nenghua and Shanxi Nenghua produced a total of approximately 572,000 tonnes and sold 574,000 tonnes of methanol, generating sales income of approximately RMB1,118.0 million. In addition, Ordos Neng Hua is constructing a 600,000-tonne methanol project in Ordos City in the Inner Mongolia Autonomous Region which will have a production capacity of 600,000 tonnes per annum, which we expect to become operational in the second half of 2013.

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Electric Power Business

We own and operate seven power plants, with total net installed capacity of 218 MW, which generate electric power primarily for internal use and, to a lesser extent, external sales. The six cogeneration power plants operated by Hua Ju Energy are able to generate both electric power and heat. We ceased production at the power plant operated by Shanxi Nenghua on January 1, 2012 due to high fuel costs. We are in the process of disposing this power plant together with Tianhao Chemical’s methanol assets. In 2012, we generated a total of approximately 1,155.2 million kWh of electricity and sold approximately 856.4 million kWh of electricity, generating approximately RMB323.6 million in revenue.

Heat Supply Business

In 2012, we produced approximately 1.4 million steam tonnes of heat and sold approximately 230,000 steam tonnes of heat, generating sales revenue of approximately RMB39.9 million.

Factors Affecting Our Results of Operations

Our results of operations and financial condition are affected by a number of factors, many of which are beyond our control, including those set forth below:

Conditions and regulations affecting the coal mining industry

Our coal mining operations in the PRC are subject to various PRC laws and regulations, including developmental, environmental and health and safety laws and regulations, and various national and local policies, which could facilitate our acquisition activities and the overall growth of our business and operations, industry consolidation could result in larger coal mining enterprises that compete against us.

Our mining operations in Australia are regulated by Australian federal and state governments with respect to environmental issues such as water quality, air quality, dust impact, noise impact, planning issues (such as approvals to expand existing mines, develop new mines or change mining methods), and health and safety issues. Future changes to, and our continuing compliance with, these regulations may have a material effect on our business and results of operations. See “Item 3. Key Information — D. Risk Factors — Risks Relating to Our Business and Industry – Our coal operations are extensively regulated by the PRC and Australian government, and government regulations may limit our activities and adversely affect our business, results of operations and financial condition.”

Demand for coal

Given the nature of our operations, the demand for coal will continue to have a significant effect on our results of operations. Global coal demand correlates strongly with the global economy and, as such, any downturn or prolonged depression of economic activity may have an adverse effect on demand for coal. Coal demand is also affected by a variety of factors beyond our control, such as the availability and prices of alternative energy sources to coal, international shipping costs and costs of conducting coal mining operations.

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Acquisition and expansion

Our business expansion plans are primarily dependent on successfully acquiring companies that can grow or diversify our existing operations. Recently, our acquisitions have included equity interests in coal mines in Australia and potash mineral exploration permits in Canada. Our coal reserves, future production capacity and, consequently, our revenues and results of operations, will depend on the success of acquired mining operations. Our business and results of operations could be affected if we are unable to successfully integrate our acquisitions or achieve anticipated additional revenue and earnings.

Exchange rate fluctuations

Assets, liabilities and the fair value of financial instruments and balances that we incur, create or acquire in the process of our international operations and which are denominated in currencies other than RMB, or in currencies other than the functional currencies of the relevant business units, may fluctuate substantially depending on changes in currency exchange rates. See “Item 3. Key Information — D. Risk Factors — Risks Relating to Our Business and Industry – Our business, results of operations and financial condition depend in part on our ability to continue acquiring or developing suitable coal reserves” and “Item 11. Quantitative and Qualitative Disclosures of Market Risk – Foreign Currency Exchange Rate Risk.”

Product mix

Our products, which include thermal coal, semi-hard coking coal, semi-soft coking coal, PCI coal and 1/3 coking coal, generally have different prices and gross margins. For example, our No. 1 clean coal has historically had a higher gross margin than our other products and, as such, an increased proportion of sales income generated from No. 1 clean coal would result in higher gross profits. Conversely, if the sales volume of lower gross margin coal products, such as thermal coal, increased in comparison to higher margin coal products, then we would have lower gross profits despite an increase in sales volume. In addition, the future launch of new products will also affect our product mix and, consequently, our revenues, gross margins and results of operations.

Production capacity

Our results of operations and future growth prospects are affected by our coal production capacity. Our production capacity and production volume may be affected by the macroeconomy and customer demand. Our production capacity and volume will also depend on our ability to obtain necessary capital and required approvals and permits, as well as production capacity, customer demand and general economic factors. We will continue to focus on increasing our production capacity by developing our existing projects and domestic and international acquisitions. Increasing our production capacity also increases costs, expenses and capital expenditures.

Coal prices

The selling prices of our coal products are influenced by price fluctuations in the PRC domestic market and the global market. In addition, potential reduction in the production in high cost coal producing regions are expected to provide support for coal price going forward. In the long run, coal prices are expected to increase as a result of growing demand for coal to fuel industrialization and urbanization and steady production increase due to higher royalties and environmental and social related costs.

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Cost of sales

Our results of operations are affected by our cost of sales, which mainly comprises wages and employee benefits, purchases of coal from third parties for trading purposes, materials, land subsidence, restoration, rehabilitation and environmental costs, depreciation and amortization expenses and business tax and surcharges associated with our coal business and railway transportation business. Key factors impacting these costs include variations in production volume, the cost of power, fuel and labor, the application of advanced mining technologies, changes in railway fees and port fees, and contractual terms of our coal products.

Transportation volume and cost

We primarily use railways and highways and, to a lesser extent, domestic and international shipping lanes, to transport coal. We primarily rely on the national railway system in the PRC and railway systems operated by third parties in Australia to transport our coal. In addition, we also utilize our private railway network to transport other goods upon the request of our railway transportation customers. We also transport coal on the national railway system to ports, from which we ship coal to our customers. Railway, waterway and roadway transportation costs are charged by carriers who deliver our coal products to our customers. Our revenue and results of operations may be affected by fluctuations in the transportation volume and capacity of national and state railway systems and of our own railway assets, as well as fluctuations in the costs associated with transporting coal to our customers.

Coal resources and reserves

Coal resources and reserves data is a key element in our decision-making process. All coal reserves data are estimates, which are revised when additional information becomes available (for example, when additional coal mines commence operations or when actual coal production or extraction commences). If the amount or quality of coal mined differs from the reserve estimates, we may have to further process or wash the coal mined in order to produce coal of a saleable quality. See “Item 3. Key Information — D. Risk Factors — Risks Relating to Our Business and Industry — The coal reserve data in this annual report are only estimates, which may differ materially from actual reserve amounts.”

Results of Operations

The following table sets forth our income statement and the percentage of each line item to our total revenue for the periods indicated:

	2010						2011						2012
	RMB (million)			%			RMB (million)			%			RMB (million)			%
Total revenue		33,944.3			100.0			47,065.8			100.0			58,146.2			100.0
Gross sales of coal		32,590.9			96.0			45,181.2			96.0			56,200.6			96.7
Railway transportation service income		513.3			1.5			476.9			1.0			464.1			0.8
Gross sales of electric power		185.6			0.5			328.0			0.7			323.6			0.6
Gross sales of methanol		629.3			1.9			1,059.3			2.3			1,118.0			1.9
Gross sale of heat supply		25.2			0.1			20.5			0.0			39.9			0.1
Transportation costs of coal		(1,160.5	)		(3.4	)		(1,248.3	)		(2.7	)		(2,104.2	)		(3.6	)
Cost of sales and service provided		(16,801.3	)		(49.5	)		(25,725.3	)		(54.7	)		(41,961.5	)		(72.2	)
Cost of electric power		(195.5	)		(0.6	)		(362.5	)		(0.8	)		(330.8	)		(0.6	)
Cost of methanol		(716.8	)		(2.1	)		(930.2	)		(2.0	)		(911.2	)		(1.6	)
Cost of heat supply		(12.5	)		0.0			(13.8	)		0.0			(25.1	)		0.0
Gross profit		15,057.6			44.4			18,785.8			39.9			12,813.3			22.0
Selling, general and administrative expenses		(5,093.4	)		(15.0	)		(6,570.2	)		(13.9	)		(7,987.6	)		(13.7	)
Share of profit of associates		8.9			0.0			68.9			0.1			142.0			0.2
Share of loss of jointly controlled entities		(0.5	)		0.0			—			0.0			(103.2	)		0.2
Other income		3,108.1			9.2			1,075.8			2.3			2,930.4			5.0
Interest expense		(603.3	)		(1.8	)		(839.3	)		(1.8	)		(1,448.7	)		(2.5	)
Profit before income taxes		12,477.3			36.8			12,521.0			26.6			6,346.2			10.9
Income taxes		(3,171.0	)		(9.3	)		(3,545.4	)		(7.5	)		(123.9	)		(0.2	)
Profit for the year		9,306.3			27.4			8,975.6			19.1			6,222.2			10.7
Attributable to:
Equity holders of the Company		9,281.4			27.3			8,928.1			19.0			6,219.0			10.7
Non-controlling interests		24.9			0.1			47.5			0.1			3.3			0.0

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Year Ended December 31, 2012 Compared with Year Ended December 31, 2011

Total revenue

Our total revenue in 2012 increased by RMB11,080.4 million, or 23.5%, from RMB47,065.8 million to approximately RMB58,146.2 million. Our gross sales of coal, which accounted for 96.7% of our total revenue in 2012, increased by RMB11,019.4 million, or 24.4%, to RMB56,200.6 million in 2012. This reflected an increase in coal sales volume of 29.9 million tonnes, or 46.5%, primarily due to an increase in the sales volume of externally purchased coal, an increase in the sales volume of coal in Australia and an increase in the sales volume of coal by Ordos Nenghua, partially offset by a decrease in the average selling price of our coal products by RMB108.4 per tonne, or 15.3%, from RMB707.7 per tonne in 2011 to RMB599.3 per tonne in 2012, as the result of the weak demand for coal caused by the global economic slowdown.

In 2012, the transportation volume of our railway assets was approximately 17.5 million tonnes, representing a decrease of approximately 0.6 million tonnes, or 3.2%, compared to 2011. Our railway transportation services income (income from transported volume settled on the basis of ex-mine prices and special purpose railway transportation fees borne by customers) decreased by RMB12.8 million, or 2.7%, from approximately RMB476.9 million in 2011 to approximately RMB464.1 million in 2012. Our gross sales of electric power decreased by RMB4.4 million, or 1.3%, from approximately RMB328.0 million 2011 to RMB323.6 million in 2012. This decrease was due to decreased power generation and sales of electric power in 2012, in part due to the high cost of fuel as a result of which we shut down power generation operations at Shanxi Nenghua beginning January 1, 2012. Our gross sales of methanol increased by RMB58.7 million, or 5.5%, from approximately RMB1,059.3 million in 2011 to approximately RMB1,118.0 million in 2012. This increase was primarily due to the increased production and sales volumes by Yulin Nenghua. Our gross sales of heat supply increased by RMB19.4 million, or 94.6%, from approximately RMB20.5 million in 2011 to approximately RMB39.9 million in 2012. This increase was primarily due to our provision of heat supply to more customers for a longer duration as compared with 2011.

Transportation costs of coal

Transportation costs of coal primarily consist of railway, waterway and roadway transportation costs charged by carriers that deliver our coal products to our customers. Our coal transportation costs increased by RMB855.9 million, or 68.6%, from approximately RMB1,248.3 million in 2011 to approximately RMB2,104.2 million in 2012, primarily due to the increase in the sales volume of coal. Coal transportation costs in 2012 consisted of transportation costs of approximately RMB281.8 million for coal sold in the PRC and approximately RMB1,822.4 million for coal sold outside of the PRC.

Cost of sales and services provided

Our cost of sales and railway transportation services consists of the costs of our coal business and railway transportation business, which primarily consist of wages and employee benefits, purchases of coal from third parties for trading purposes, materials, land subsidence, restoration, rehabilitation and environmental costs, depreciation and amortization expenses and business tax and surcharges. Our cost of sales and services provided increased by RMB16,236.2 million, or 63.1%, from approximately RMB25,725.3 million in 2011 to approximately RMB41,961.5 million in 2012, primarily due to an increase of approximately RMB11,974.0 million in the cost of traded coal as a result of an increase in the volumes of coal we purchased from third parties for trading purposes. In addition, cost of sales of traded coal is generally higher than cost of sales of our in-house coal products because purchase prices from other coal mining companies and trading companies are higher than the production cost of our in-house coal products. The increase in our cost of sales and services provided was also caused by an increase of approximately RMB1,435.9 million in wages and employee benefits as a result of an increase in employee headcount.

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Cost of electric power

Our cost of electric power operations primarily consists of raw material and labor costs incurred to generate electric power. Our cost of electric power decreased by RMB31.7 million, or 8.7%, from approximately RMB362.5 million in 2011 to approximately RMB330.8 million in 2012, primarily due to decreased power generation at the power plants operated by Hua Ju Energy and Yulin Nenghua, as well as the closure of Shanxi Nenghua’s power plant due to high fuel costs.

Cost of methanol

Our cost of methanol primarily consists of raw materials, labor costs, depreciation and other manufacturing overhead. Our cost of methanol decreased by RMB19.0 million, or 2.0%, from approximately RMB930.2 million in 2011 to approximately RMB911.2 million in 2012 primarily because the methanol project at Shanxi Nenghua ceased production due to a shortage of raw materials in April 2012.

Cost of heat supply

Our cost of heat supply primarily consists of raw materials and labor in our heat supply business. Our cost of heat supply increased by RMB11.3 million, or 81.9%, from approximately RMB13.8 million in 2011 to approximately RMB25.1 million in 2012, primarily due to an increase of 60,000 steam tonne in heat supply sold.

Selling, general and administrative expenses

Our selling, general and administrative expenses increased by RMB1,417.4 million, or 21.6%, from approximately RMB6,570.2 million in 2011 to approximately RMB7,987.6 million 2012, primarily due to increases in impairment losses on intangible assets, goodwill and inventories of approximately RMB575.7 million, and RMB214.1 million in distribution charges.

Share of income of associates

Our share of income from associates increased by RMB73.0 million, or 106.0%, from approximately RMB68.9 million in 2011 to RMB142.0 million in 2012, due to an increase in our income of RMB82.6 million from Huadian Zouxian Power Generation Company Limited (“Huandian Zouxian”).

Other income

Our other income increased significantly by RMB1,854.7 million, or 172.4%, from approximately RMB1,075.8 million in 2011 to approximately RMB2,930.4 million in 2012. This increase was primarily due to a gain in bargain purchase in the sum of RMB1,269.3 million arising from our acquisition of Gloucester, resulting from a decrease in the market capitalization and market price of the consideration shares, as well as an increase of RMB364.6 million in bank deposit interest and exchange gains of RMB195.6 million from Yancoal Australia.

Interest expenses

Our interest expenses increased by RMB609.4 million, or 72.6%, from approximately RMB839.3 million in 2011 to RMB1,448.7 million in 2012, mainly due to the issuance of corporate bonds in the amount of US$1.0 billion and an increase in bank loans in 2012.

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Profit before income tax

As a result of the foregoing, our profit before income taxes decreased by approximately RMB6,174.8 million, or 49.3%, from approximately RMB12,521.0 million in 2011 to RMB6,346.2 million in 2012.

Income tax expenses

Our income tax decreased by RMB3,421.4 million, or 96.5%, from approximately RMB3,545.4 million in 2011to approximately RMB123.9 million in 2012, primarily due to a decrease in current income tax expenses of RMB1,725.2 million and a decrease in the income tax expenses in our Australian subsidiaries of RMB1,085.2 million caused by an increase in its deferred tax assets related to the implementation of MRRT.

Profit for the year

As a result, our profit for the year decreased by RMB2,753.4 million, or 30.7%, from approximately RMB8,975.6 million in 2011 to approximately RMB6,222.2 million in 2012. The profit attributable to equity holders of the Company decreased by RMB2.709.1 million, or 30.3%, from RMB8,928.1 million in 2011 to approximately RMB6,219.0 million in 2012. In particular, net profit from our trading of externally purchased coal in 2012 was approximately RMB28.0 million, which represented approximately 0.45% of our profit for the year.

Year Ended December 31, 2011 Compared with Year Ended December 31, 2010

Total revenue

Our total revenue increased RMB13,121.5 million, or 38.7%, from approximately RMB33,944.3 million in 2010 to approximately RMB47,065.8 million in 2011. Our gross sales of coal, which accounted for 96.0% of our total revenue in 2011, increased by RMB12,590.3 million, or 38.6%, to approximately RMB45,181.2 million in 2011. The increase in gross sales of coal was primarily due to changes in our product mix, increased domestic and global demand and an increase in our average selling price. In 2011, our average selling price of coal products increased approximately RMB44.2 per tonne to RMB707.7 per tonne, a 6.7% increase from 2010. Our sales volume of coal products increased 29.5% from approximately 49.6 million tonnes in 2010 to 64.3 million tonnes in 2011.

In 2011, the transportation volume of our railway assets was approximately 18.1 million tonnes, representing a decrease of approximately 1.7 million tonnes, or 8%, from 2010, primarily due to lower demand by customers for goods to be transported on our railways. Accordingly, our railway transportation services income (income from transported volume settled on the basis of ex-mine prices and special purpose railway transportation fees borne by customers) decreased by RMB36.4 million, or 7.1%, from approximately RMB513.4 million in 2010 to approximately RMB476.9 million in 2011.

Our gross sales of methanol increased by approximately RMB430.0 million, or 68.3%, from RMB629.3 million in 2010 to approximately RMB1,059.3 million in 2011. The increase in gross sales of methanol was mainly attributable to an increase in sales volumes of methanol. Our gross sales of electric power increased by approximately RMB142.4 million, or 76.8%, from approximately RMB185.6 million in 2010 to approximately RMB328.0 million in 2011. Our gross sales of heat supply decreased by RMB4.8 million, or 18.9%, from approximately RMB25.2 million in 2010 to approximately RMB20.5 million in 2011, due primarily to increased consumption of heat supply by our own coal mines.

Transportation costs of coal

Our coal transportation costs increased by RMB87.8 million, or 7.6%, from approximately RMB1,160.5 million in 2010, to approximately RMB1,248.3 million in 2011, which included transportation costs for our coal sold in the PRC of approximately RMB311.7 million and for coal sold outside the PRC of approximately RMB936.6 million. This increase was primarily due to our acquisition of Yancoal Resources and the related increase in sales volumes.

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Cost of sales and services provided

Our total cost of sales and services provided increased by RMB8,924.0 million, or 53.1%, from RMB16,801.3 million in 2010 to approximately RMB25,725.3 million in 2011, primarily due to increased sales volumes of coal. The increased sales volumes resulted in an increase of RMB5,593.3 million in purchases of coal from third parties for trading purposes, an increase of RMB1,151.1 million in wages and employee benefits and an increase of RMB523.5 million in costs for materials. The increase was also due to a RMB366.9 million increase in annual fees and amortization of mining rights, an increase of RMB297.3 million increase in electricity costs and an RMB808.8 million in other costs of sales and services.

Cost of electric power

Our cost of electric power increased by RMB166.9 million from approximately RMB195.5 million in 2010, to approximately RMB362.5 million in 2011, primarily due to an increase in electric power sold, as Hua Ju Energy sold the excess power it generated. Hua Ju Energy sold approximately 895.5 million kWh of electric power in 2011 compared to 468.6 million kWh of electric power in 2010.

Cost of methanol

Our production costs increased from approximately RMB716.8 million in 2010 to approximately RMB930.2 million in 2011, primarily due to an increase in the volume of methanol sold from approximately 376,000 tonnes in 2010 to 529,000 tonnes in 2011 reflecting increased customer demand.

Cost of heat supply

Our cost of heat supply increased by RMB1.3 million, from approximately RMB12.5 million in 2010 to approximately RMB13.8 million in 2011, primarily due to increases in coal prices and wages, as well as a slight increase in production volume from 1.27 million steam tonnes to 1.28 million steam tonnes.

Selling, general and administrative expenses

Our selling, general and administrative expenses increased by RMB1,476.8 million, or 29.0%, from approximately RMB5,093.4 million in 2010 to approximately RMB6,570.2 million in 2011. This increase in primarily attributable to increased selling, general and administrative expenses for Yancoal Australia primarily reflecting increased sales volumes. The increase was also due to increased selling, general and administrative expenses for Ordos Neng Hua, primarily reflecting increased sales volumes and expanded operations. In addition, the increase also reflected a RMB184.4 million increase in impairment loss on Tianhao Chemicals’ property, plant and equipment.

Share of income of associates

Our share of income from associates, increased by RMB60.1 million, or 677.2%, from RMB8.9 million in 2010 to approximately RMB68.9 million in 2011, primarily due to increases in investment income of RMB19.0 million and RMB41.0 million from Huadian Zouxian and Yankuang Finance, respectively.

Other income

Our other income decreased by RMB2,032.3 million, or 65.4%, from approximately RMB3,108.1 million in 2010 to approximately RMB1,075.8 million in 2011, primarily due to a decrease in foreign exchange gains of RMB2,146.9 million. The decrease in foreign exchange gains was due primarily to Yancoal Australia’s decrease in foreign exchange gains from RMB2,688.2 million in 2010 to RMB504.4 million in 2011 relating to its foreign exchange hedging contracts to manage foreign currency risk arising from its expected revenue in foreign currencies. The decrease was partially offset by an increase of RMB170.5 million in interest income, due primarily to an increase in bank deposits as compared to the prior year.

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Interest expenses

Our interest expenses increased by RMB236.0 million, from approximately RMB603.3 million in 2010 to approximately RMB839.3 million in 2011, primarily due to an increase in our bank borrowings and financing costs in connection with the acquisition of mining rights of Zhuanlongwan Project.

Profit before income tax

As a result of the foregoing, our profit before income taxes increased by approximately RMB43.7 million, or 0.4%, from approximately RMB12,477.3 million in 2010 to approximately RMB12,521.0 million in 2011.

Income tax expenses

Our income tax expenses increased by RMB374.3 million, or 11.8%, from approximately RMB3,171.0 million in 2010, to approximately RMB3,545.4 million in 2011, primarily due to an increase in our taxable income.

Profit for the year

As a result, our profit for the year decreased by RMB330.7 million, or 3.6%, from approximately RMB9,306.3 million in 2010 to approximately RMB8,975.6 million in 2011. The profit attributable to equity holders of the Company decreased by RMB353.3 million, or 3.8%, from approximately RMB9,281.4 million in 2010 to approximately RMB8,928.1 million in 2011.

Segment Information

The following table sets forth a breakdown of our total consolidated gross revenues for each of the years indicated and the percentage contribution of each segment to our total gross revenues:

	2010						2011						2012
	RMB			%			RMB			%			RMB			%
	(in millions, except for percentages)
Mining revenue		32,930.3			97.0			45,468.5			96.6			56,419.8			97.0
Coal railway transportation revenue		549.3			1.6			528.6			1.1			496.6			0.9
Methanol, electricity and heat supply revenue		1,295.3			3.8			1,664.1			3.5			1,765.9			3.0
Unallocated and eliminations		(830.7	)		(2.4	)		(595.3	)		(1.3	)		(536.2	)		(0.9	)
Gross revenue		33,944.3			100.0			47,065.8			100.0			58,146.2			100.0

55

We are mainly engaged in the mining, washing, processing and railway distribution of coal. For the year ended December 31, 2012, we derived our revenue mainly derived from coal sales in the PRC.

F. Tabular Disclosure of Contractual Obligations

The following table sets forth our contractual obligations and commercial commitments as of December 31, 2012:

	Payments Due by Period
	Total		Less than one Year		One to three years		Three to five years		More than five years
	(RMB in millions)
Contractual Obligations
Unsecured bank borrowings		8,900.1		5.024.5		1,076.0		2,799.6		—
Secured bank borrowings		18,625.7		657.9		910.0		880.8		16,177.0
Finance leases		232.7		30.2		93.9		93.9		14.7
Guaranteed notes		11,237.8		—		—		3,818.8		7,419.1
Loans pledged by machineries		2,000.0		2,000.0		—		—		—
Capital commitments for the acquisition of assets		2,937.1		2.871.8		65.3		—		—
Mining right compensation fee		1,981.4		396.3		792.6		792.6		—
Amounts due to Controlling Shareholder and its subsidiaries		93.7		93.7		—		—		—
Total		46,008.5		3,178.1		2,937.8		8,385.7		23,610.8

The following table sets forth our consolidated interest-bearing borrowings as of December 31, 2011 and 2012:

	As of December 31,
	2011		2012
	(RMB in millions)
Secured bank borrowings		19,154.7		18,625.7
Unsecured bank borrowings		15,303.1		8,900.1
Total		34,457.8		27,525.9

Secured Bank Borrowings

As of December 31, 2012, we had secured bank loans outstanding of approximately RMB18,625.7 million (approximately US$2,989.6 million), which primarily consisted of secured bank borrowings obtained for financing the acquisition of Felix. The borrowings are guaranteed by the Company and counter-guaranteed by our Controlling Shareholder. The borrowings are secured by a portion of our term deposits. As of December 31, 2012, we had term deposits of approximately RMB66.4 million that secured bank borrowings.

56

Borrowings of RMB12,148.5 million (US$1,930.0 million) carried interest at three-month LIBOR plus a margin of 0.75% (approximately 1.06%) and borrowings of RMB283.3 million (US$45.0 million) carried interest at three-month LIBOR plus a margin of 0.8% (approximately 1.11%). The borrowings of approximately RMB6,072.1 million (approximately US$964.7 million) carried interest at three-month LIBOR plus 2.8% (approximately 3.11%). Other borrowings incurred in connection with our acquisition of Gloucester, amounting to approximately RMB121.8 million, (approximately US$19.4 million) carried interest at 5.68%. For more information on our secured borrowings, please see Note 37 to the consolidated financial statements.

Unsecured Bank Borrowings

We had unsecured bank borrowings of RMB8,900.1 million as of December 31, 2012, including a loan in the amount of RMB1.3 billion (US$203 million), carrying interest at LIBOR plus a margin of 1.7% per annum, obtained by Yancoal International to replace the other loans for the acquisition of potash exploration permits in Canada. For more information about our unsecured borrowings, please see Note 37 to the consolidated financial statements to this annual report.

Bond Offerings

The RMB Bond Offering

See “Item 4. Information on the Company – A. History and Development of our Company – Bond Offerings – the RMB Bond Offering.”

The US$ Bond Offering

See “Item 4. Information on the Company – A. History and Development of our Company – Bond Offerings – the US$ Bond Offering.”

Amounts due to Controlling Shareholder and its Subsidiaries

The amounts due to the Controlling Shareholder and its subsidiary companies do not bear any interest and are unsecured. The following table sets forth the amounts due to the Controlling Shareholder and its subsidiary companies as of December 31, 2011 and 2012.

	As of December 31,
	2011			2012
	(RMB’000)
Term for Repayment
Within one year		1,155,168			1,767,998
More than one year, but not exceeding two years		—			—
Total due		1,155,168			1,767,998
Less: amounts due within one year		(1,155,168	)		(1,767,998	)
Amounts will due over one year		—			—

As of December 31, 2012, neither the Controlling Shareholder nor its subsidiaries had used our funds for non-operational matters.

Critical Accounting Policies

We prepare our consolidated financial statements in accordance with IFRS as issued by the IASB. The preparation of these financial statements requires us to make estimates and assumptions about the carrying amounts of items in the financial statements that cannot be measured accurately. These judgments, estimates and assumptions are based on the historical experience of our management as well as other relevant factors. Actual results may differ from these estimates. We review the foregoing judgments, estimates and assumptions regularly on a going concern basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

57

The following are the critical estimates that we have made in the process of applying the accounting policies and that have the most significant effect on the amounts recognized in financial statements.

Depreciation

The cost of mining structures is depreciated using the units of production method based on the estimated production volume for which the structure was designed. Management exercises its judgment in estimating the useful lives of the depreciable assets and the production volume of each mine. The estimated coal production volume of each mine is updated on a regular basis and takes into account recent production and technical information of each mine. These changes are considered changes in estimates for accounting purposes and are reflected on a prospective basis in related depreciation rates. Estimates of the production volumes are inherently imprecise and represent only approximate amounts because of the subjective judgments involved in developing such information.

Amortization of assets

Mining reserves, mining resources and rail access rights are amortized on a straight-line basis or unit of production basis over the shorter of their useful lives and the contractual period. The expensing of overburden removal costs is based on saleable coal production over the estimated economically recoverable reserves. The useful lives are estimated on the basis of the total proven and probable reserves of a coal mine. Proven and probable coal reserve estimates are updated on a regular basis and take into account each mine’s recent production and technical information.

Provision for land subsidence, restoration, rehabilitation and environmental costs

The provision for land subsidence, restoration, rehabilitation and environmental costs is reviewed regularly to verify that it properly reflects the remaining obligation arising from the current and past mining activities. Provisions for land subsidence, restoration, rehabilitation and environmental costs are determined by our management based on past experience, its estimate of current and future costs and predictions for government policies.

Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The determination of value in use requires us to estimate the future cash flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate the present value. As of December 31, 2012, the carrying amount of goodwill was approximately RMB2,573.8 million. During the year ended December 31, 2012, we recognized impairment loss on goodwill of RMB17.6 million. Cash flow projections during the budget period for each of the above units are based on the budgeted revenue and expected gross margins during the budget period and the raw materials price inflation during the budget period. Expected cash inflows/outflows have been determined based on past performance and management’s market development expectations.

Estimated impairment of property, plant and equipment

When there are indications of impairment, we take into consideration the estimate of future cash flows. The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows. When actual future cash flows are less than expected, a material impairment loss may arise. In estimating future cash flows, management takes into account recent production and technical advancements. As price and cost levels change from year to year, the estimate of future cash flows also changes. Notwithstanding that management has considered all the available information in making their impairment assessment, inherent uncertainty exists as to the conditions of mines and the environment, and actual write-offs may be higher than the estimated amounts. As of December 31, 2012, the carrying amount of property, plant and equipment was approximately RMB39,503.1 million. During the year ended December 31, 2012, no property, plant and equipment was written off as expenses. In addition, we recognized impairment loss on property, plant and equipment of RMB226.9 million during the year ended December 31, 2012.

58

In the process of applying our accounting policies, management has made the following accounting judgments:

Acquisitions

During the year, we acquired several subsidiaries or business as set out in Notes 45 and 46 to the consolidated financial statements included in this annual report. We determined whether acquisitions were to be accounted for as an acquisition of business or an acquisition of assets based on factors including (i) whether the acquiree has relevant input, process or output and (ii) whether the acquiree has planned principal activities or is pursuing a plan to produce output and has access to a customer base.

In addition, management also made judgments in determining whether we would register the transfer of certain operating licenses immediately upon the payment of consideration.

Recent Changes in Accounting Pronouncements

In the current year, we have applied, for the first time, a number of new standards and interpretations, amended and revised standards and interpretations (“new IFRSs”) issued by the IASB and the International Financial Reporting Interpretations Committee (the “IFRIC”) of the IASB which are effective for our fiscal year beginning January 1, 2012:

IFRSs 7 (Amendments) Disclosures – Transfers of Financial Assets

The adoption of the New IFRS had no material effect on how the results and the financial position for the current or prior accounting years have been prepared. Accordingly, no prior period adjustment is required.

We have not applied the following new and revised standards, amendments or interpretations that have been issued but are not effective as of the date of this annual report:

IFRSs (Amendments)	Annual Improvements to IFRSs 2009-2011 Cycle1
IFRS 7 (Amendments)	Disclosures – Offsetting Financial Assets and Financial Liabilities1
IFRS 9	Financial Instruments2
IFRS 10	Consolidated Financial Statements1
IFRS 11	Joint Arrangements1
IFRS 12	Disclosure of Interests in Other Entities1
IFRS 10, IFRS 11 and IFRS 12 (Amendments)	Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance1
IFRS 13	Fair Value Measurement1
IAS 1 (Amendments)	Presentation of Items of Other Comprehensive Income3
IAS 19 (Revised)	Employee Benefits1
IAS 28 (Revised)	Investments in Associates and Joint Ventures1
IAS 32 (Revised)	Offsetting Financial Assets and Financial Liabilities4
IFRIC 20	Stripping Costs in the Production Phase of a Surface Mine1

(1) Effective for annual periods beginning on or after January 1, 2013

(2) Effective for annual periods beginning on or after January 1, 2015

(3) Effective for annual periods beginning on or after July 1, 2012

(4) Effective for annual periods beginning on or after January 1, 2014

Under IFRS 9, all recognized financial assets that are within the scope of IAS 39 Financial Instruments: Recognition and Measurement are subsequently measured at either amortized cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortized cost at the end of subsequent accounting periods. All other debt investments and equity investments are measured at their fair values at the end of subsequent accounting periods.

59

In relation to financial liabilities, the significant change relates to financial liabilities that are designated as at fair value through profit or loss. Specifically, under IFRS 9, for financial liabilities that are designated as at fair value through profit or loss, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is presented in other comprehensive income, unless the presentation of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability’s credit risk are not subsequently reclassified to profit or loss. Previously, under IAS 39, the entire amount of the change in the fair value of the financial liability designated as at fair value through profit or loss was presented in profit or loss.

IFRS 10 replaces the consolidation guidance in IAS 27 Consolidated and Separate Financial Statements and SIC-12 Consolidation — Special Purpose Entities by introducing a single consolidation model for all entities based on control, irrespective of the nature of the investee (i.e. whether an entity is controlled by voting rights of investors or by other contractual arrangements as is common in special purpose entities). Under IFRS 10, control is based on whether an investor has (1) power over the investee; (2) exposure, or rights, to variable returns from its involvement with the investee; and (3) the ability to use its power over the investee to affect the amount of the returns.

IFRS 11 introduces new accounting requirements for joint arrangements, replacing IAS 31 Interests in Joint Ventures. The option to apply the proportional consolidation method when accounting for jointly controlled entities has been removed. Additionally, IFRS 11 eliminates jointly controlled assets to now only differentiate between joint operations and joint ventures. A joint operation is a joint arrangement whereby the parties that have joint control have rights to the assets and obligations for the liabilities. A joint venture is a joint arrangement whereby the parties that have joint control have rights to the net assets.

IFRS 12 requires enhanced disclosures about both consolidated entities and unconsolidated entities in which an entity has involvement. The objective of IFRS 12 is to require information so that financial statement users may evaluate the basis of control, any restrictions on consolidated assets and liabilities, risk exposures arising from involvements with unconsolidated structured entities and non-controlling interest holders’ involvement in the activities of consolidated entities.

IFRS 13 applies when another IFRS requires or permits fair value measurements or disclosures about fair value measurements (and measurements such as fair value less costs to sell, based on fair value or disclosures about those measurements), except for certain exemptions. IFRS 13 requires the disclosures of fair values through a ‘fair value hierarchy’. The hierarchy categorizes the inputs used in valuation techniques into three levels. The hierarchy gives the highest priority to (unadjusted) quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure fair value are categorized into different levels of the fair value hierarchy, the fair value measurement is categorized entirely at the lowest level input that is significant to the entire measurement.

IAS 1 (Amendments) retain the option to present profit or loss and other comprehensive income in either a single statement or in two separate but consecutive statements. However, IAS 1 (Amendments) requires additional disclosures to be made in the other comprehensive income section such that items of other comprehensive income are grouped into two categories: (1) items that will not be reclassified subsequently to profit or loss; and (2) items that may be reclassified subsequently to profit or loss when specific conditions are met. Income tax on items of other comprehensive income is required to be allocated on the same basis. IAS 1 (Amendments) are effective for annual periods beginning on or after July 1, 2012. The presentation of items of other comprehensive income will be modified accordingly when the amendments are applied in the future accounting periods.

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine applies to waste removal costs that are incurred in surface mining activity during the production phase of the mine (“production stripping costs”). Under this Interpretation, the costs from this waste removal activity (“stripping”) which provide improved access to ore are recognized as a non-current asset (“stripping activity asset”) when certain criteria are met, whereas the costs of stripping activities where the benefit is realized in the form of inventory produced are accounted for in accordance with IAS 2 Inventories. The stripping activity asset is accounted for as an addition to, or as an enhancement of, an existing asset and classified as tangible or intangible according to the nature of the existing asset of which it forms part. When the costs of the stripping activity asset and the inventory produced are not separately identifiable, production stripping costs are allocated between the inventory produced and the stripping activity asset by using an allocation basis that is based on a relevant production measure. IFRIC 20 is effective for annual periods beginning on or after January 1, 2013. Under the existing policy, the Company separately present the stripping costs on the balance sheet. Upon the subsequent adoption of the Interpretation, the presentation on the balance sheet will be amended accordingly.

60

Except for the abovementioned standards or interpretations, the directors expect that the application of other standards or interpretations will have no material impact on the Group’s financial statements.

ITEM 19. EXHIBITS

Documents filed as exhibits to this annual report:

Exhibit Number	Description
1.1	Articles of Association as amended on April 23, 2012 (English Translation). (1)
4.1	Indentures dated May 16, 2012 among Yancoal International Resources Development Co., Limited, as Issuer, Yanzhou Coal Mining Company Limited, as Guarantor and Deutsche Bank Trust Company Americas as Trustee. (2)
4.2	Provision of Materials Agreement dated April 23, 2012 between Yankuang Group Company Limited and Yanzhou Coal Mining Company Limited (English Translation).
4.3	Provision of Labor and Services Agreement dated April 23, 2012 between Yankuang Group Company Limited and Yanzhou Coal Mining Company Limited (English Translation).
4.4	Provision of Administrative Services for Pension Fund Agreement dated April 23, 2012 between Yankuang Group Company Limited and Yanzhou Coal Mining Company Limited (English Translation).
4.5	Provision of Products and Materials and Equipment Lease Agreement dated April 23, 2012 between Yankuang Group Company Limited and Yanzhou Coal Mining Company Limited (English Translation).
4.6	Provision of Electricity and Heat Agreement dated April 23, 2012 between Yankuang Group Company Limited and Yanzhou Coal Mining Company Limited (English Translation).
4.7	Asset Transfer Agreement dated April 23, 2012 between Yankuang Group Company Limited, Yankuang Group Beisu Coal Mine Company Limited and Yanzhou Coal Mining Company Limited (English Translation).
8.1	List of subsidiaries of Yanzhou Coal Mining Company Limited
12.1	Certification of general manager pursuant to Rule 13a-14 or 15d-14 promulgated under the U.S. Securities Act of 1934
12.2	Certification of chief financial officer pursuant to Rule 13a-14 or 15d-14 promulgated under the U.S. Securities Act of 1934
13.1	Certification of general manager pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of the U.S. Sarbanes-Oxley Act of 2002
13.2	Certification of chief financial officer pursuant to 18 U.S.C. Section 1350, as enacted pursuant to Section 906 of the U.S. Sarbanes-Oxley Act of 2002

(1) Incorporated by reference to our announcement furnished to the Securities and Exchange Commission on Form 6-K filing on July 20, 2012

(2) Pursuant to Instruction 2(b)(i) to Item 19 of Form 20-F, we undertake to furnish this document upon request of the Securities and Exchange Commission.

61

SIGNATURES

The registrant hereby certifies that it meets all the requirements for filing on Form 20-F/A and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

		YANZHOU COAL MINING COMPANY LIMITED
		(Registrant)
Date:	October 9, 2013	By:	/s/    Zhang Yingmin
		Name:	Zhang Yingmin
		Title:	General Manager

YANZHOU COAL MINING COMPANY LIMITED

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010

AND REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

CONTENTS	PAGE(S)
REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	F1 - F3
CONSOLIDATED INCOME STATEMENTS	F4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	F5
CONSOLIDATED BALANCE SHEETS	F6
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY	F7
CONSOLIDATED STATEMENTS OF CASH FLOWS	F8 – F9
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	F10 – F102

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF

YANZHOU COAL MINING COMPANY LIMITED 兖州煤业股份有限公司

(A joint stock company with limited liability established in the People’s Republic of China)

We have audited the accompanying consolidated balance sheets of Yanzhou Coal Mining Company Limited (the “Company”) and its subsidiaries (collectively, the “Group”) as of December 31, 2012 and 2011, and the related consolidated income statements, statements of comprehensive income, changes in equity, and cash flows for each of the three years in the period ended December 31, 2012. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Group as of December 31, 2012 and 2011, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2012, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Group’s internal control over financial reporting as of December 31, 2012, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated April 29, 2013 expressed an unqualified opinion on the effectiveness of the Group’s internal control over financial reporting.

/s/ Grant Thornton

Beijing, People’s Republic of China

April 29, 2013

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF

YANZHOU COAL MINING COMPANY LIMITED 兖州煤业股份有限公司

(A joint stock company with limited liability established in the People’s Republic of China)

We have audited the internal control over financial reporting of Yanzhou Coal Mining Company Limited (the “Company”) and its subsidiaries (collectively, the “Group”) as of December 31, 2012, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Group’s internal control over financial reporting based on our audit. As indicated in Management’s Report on Internal Control Over Financial Reporting, Gloucester Coal Limited was acquired during the year ended December 31, 2012, and management’s assertion on the effectiveness of the Group’s internal control over financial reporting excluded internal control over financial reporting of Gloucester Coal Limited, whose consolidated financial statements reflect total assets and revenues constituting 9 percent and 3 percent, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2012. Our audit of, and the opinion on, the Company’s internal control over financial reporting also excludes internal control over financial reporting of Gloucester Coal Limited.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of the effectiveness to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, the Group maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on the criteria established in Internal Control — Integrated Framework issued by COSO.

F-2

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements of the Group as of and for the year ended December 31, 2012, and our report dated April 29, 2013 expressed an unqualified opinion on those financial statements.

/s/ Grant Thornton

Beijing, People’s Republic of China

April 29, 2013

F-3

YANZHOU COAL MINING COMPANY LIMITED

CONSOLIDATED INCOME STATEMENTS

			Year ended December 31,
	NOTES		2012			2011			2010
			RMB’000			RMB’000			RMB’000
GROSS SALES OF COAL		7		56,200,600			45,181,229			32,590,911
RAILWAY TRANSPORTATION SERVICE INCOME				464,068			476,852			513,282
GROSS SALES OF ELECTRICITY POWER				323,646			327,969			185,542
GROSS SALES OF METHANOL				1,117,952			1,059,323			629,290
GROSS SALES OF HEAT SUPPLY				39,918			20,467			25,227
TOTAL REVENUE				58,146,184			47,065,840			33,944,252
TRANSPORTATION COSTS OF COAL		7		(2,104,225	)		(1,248,268	)		(1,160,470	)
COST OF SALES AND SERVICE PROVIDED		8		(41,961,540	)		(25,725,294	)		(16,801,323	)
COST OF ELECTRICITY POWER				(330,803	)		(362,472	)		(195,536	)
COST OF METHANOL				(911,203	)		(930,239	)		(716,802	)
COST OF HEAT SUPPLY				(25,130	)		(13,777	)		(12,490	)
GROSS PROFIT				12,813,283			18,785,790			15,057,631
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		9		(7,987,636	)		(6,570,203	)		(5,093,442	)
SHARE OF PROFIT OF ASSOCIATES		29		141,986			68,939			8,870
SHARE OF LOSS OF JOINTLY CONTROLLED ENTITIES		32		(103,217	)		—			(462	)
OTHER INCOME		10		2,930,445			1,075,765			3,108,081
INTEREST EXPENSES		11		(1,448,679	)		(839,305	)		(603,343	)
PROFIT BEFORE INCOME TAXES		13		6,346,182			12,520,986			12,477,335
INCOME TAXES		12		(123,937	)		(3,545,379	)		(3,171,043	)
PROFIT FOR THE YEAR				6,222,245			8,975,607			9,306,292
Attributable to:
Equity holders of the Company				6,218,969			8,928,102			9,281,386
Non-controlling interests				3,276			47,505			24,906
				6,222,245			8,975,607			9,306,292
EARNINGS PER SHARE, BASIC AND DILUTED		16		RMB 1.26			RMB 1.82			RMB 1.89
EARNINGS PER ADS, BASIC AND DILUTED		16		RMB 12.64			RMB 18.15			RMB 18.87

F-4

YANZHOU COAL MINING COMPANY LIMITED

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Year ended December 31,
	2012			2011			2010
	RMB’000			RMB’000			RMB’000
Profit for the year		6,222,245			8,975,607			9,306,292
Other comprehensive income (after income tax):
Available-for-sales investments:
Change in fair value		(5,923	)		(20,763	)		(87,270	)
Deferred taxes		1,481			5,190			21,818
		(4,442	)		(15,573	)		(65,452	)
Cash flow hedges:
Cash flow hedge amounts recognized in other comprehensive income		110,196			(213,459	)		54,532
Reclassification adjustments for amounts transferred to income statement (included in selling, general and administrative expenses)		(26,501	)		12,627			(6,576	)
Deferred taxes		(28,641	)		62,073			(24,350	)
		55,054			(138,759	)		23,606
Share of other comprehensive income of associates		90			—			1,107
Exchange difference arising on translation of foreign operations		297,721			(569,310	)		173,415
Other comprehensive income (loss) for the year		348,423			(723,642	)		132,676
Total comprehensive income for the year		6,570,668			8,251,965			9,438,968
Attributable to:
Equity holders of the Company		6,567,392			8,204,460			9,414,110
Non-controlling interests		3,276			47,505			24,858
		6,570,668			8,251,965			9,438,968

F-5

YANZHOU COAL MINING COMPANY LIMITED

CONSOLIDATED BALANCE SHEETS

			At December 31,
	NOTES		2012		2011
			RMB’000		RMB’000
ASSETS
CURRENT ASSETS
Bank balances and cash		17		12,717,358		8,145,297
Term deposits		17		3,186,957		9,543,214
Restricted cash		17		190,090		21,076
Bills and accounts receivable		18		7,459,603		7,312,074
Royalty receivable		19		114,798		—
Inventories		20		1,565,531		1,391,247
Prepayments and other receivables		21		4,196,999		3,624,879
Prepaid lease payments		22		18,418		18,975
Prepayment for resources compensation fees		23		—		3,356
Derivative financial instruments		38		90,731		104,910
Tax recoverable				293,006		4,637
Overburden in advance		26		448,889		261,441
TOTAL CURRENT ASSETS				30,282,380		30,431,106
NON-CURRENT ASSETS
Intangible assets		24		33,634,245		26,205,619
Prepaid lease payments		22		695,675		713,425
Prepayment for resources compensation fees		23		—		5,309
Property, plant and equipment		25		39,503,103		31,273,824
Goodwill		27		2,573,811		1,866,037
Investments in securities		28		207,076		372,800
Interests in associates		29		2,624,276		1,683,897
Interests in jointly controlled entities		32		1,086,985		19,453
Restricted cash		17		—		387,066
Long term receivables		30		2,001,458		300,083
Royalty receivable		19		1,234,649		—
Deposits made on investments		31		3,253,381		2,557,807
Deferred tax assets		41		5,605,284		1,335,165
TOTAL NON-CURRENT ASSETS				92,419,943		66,720,485
TOTAL ASSETS				122,702,323		97,151,591
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Bills and accounts payable		34		6,811,760		2,240,844
Other payables and accrued expenses		35		9,013,797		7,344,815
Provision for land subsidence, restoration, rehabilitation and environmental costs		36		3,291,857		2,856,229
Amount due to Parent Company and its subsidiary companies				93,712		352,625
Borrowings - due within one year		37		7,712,592		19,588,496
Long term payable and provision - due within one year		40		399,553		3,205
Derivative financial instruments		38		128,077		222,089
Tax payable				1,171,341		2,113,168
TOTAL CURRENT LIABILITIES				28,622,689		34,721,471
NON-CURRENT LIABILITIES
Borrowings - due after one year		37		33,283,790		14,869,324
Deferred tax liability		41		7,730,127		3,895,304
Provision for land subsidence, restoration, rehabilitation and environmental costs		36		478,409		325,414
Contingent value rights shares liabilities		39		1,432,188		—
Long term payable and provision - due after one year		40		2,063,922		15,028
TOTAL NON-CURRENT LIABILITIES				44,988,436		19,105,070
TOTAL LIABILITIES				73,611,125		53,826,541
Capital and reserves
Share capital		42		4,918,400		4,918,400
Reserves				40,907,956		37,716,090
Equity attributable to equity holders of the Company				45,826,356		42,634,490
Non-controlling interests				3,264,842		690,560
TOTAL EQUITY				49,091,198		43,325,050
TOTAL LIABILITIES AND EQUITY				122,702,323		97,151,591

F-6

YANZHOU COAL MINING COMPANY LIMITED

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

	Share capital		Share premium		Future development fund		Statutory common reserve fund		Translation reserve			Investment revaluation reserve			Cash flow hedge reserve			Retained earnings			Attributable to equity holders of the Company			Non- controlling interests			Total
	RMB’000		RMB’000		RMB’000		RMB’000		RMB’000			RMB’000			RMB’000			RMB’000			RMB’000			RMB’000			RMB’000
	(note 42)				(note 42)		(note 42)											(note 42)
Balance at January 1, 2010		4,918,400		2,981,002		3,261,874		3,204,455		19,015			151,868			6,882			14,608,311			29,151,807			102,486			29,254,293
Profit for the year		—		—		—		—		—			—			—			9,281,386			9,281,386			24,906			9,306,292
Other comprehensive income :
- Fair value change of available-for-sale investments		—		—		—		—		—			(65,452	)		—			—			(65,452	)		—			(65,452	)
- Cash flow hedge reserve recognized		—		—		—		—		—			—			23,606			—			23,606			—			23,606
- Exchange difference arising on translation of foreign operations		—		—		—		—		173,463			—			—			—			173,463			(48	)		173,415
- Share of other comprehensive income of associates		—		—		—		—		—			1,107			—			—			1,107			—			1,107
Total comprehensive income for the year		—		—		—		—		173,463			(64,345	)		23,606			9,281,386			9,414,110			24,858			9,438,968
Transactions with owners
- Disposal of a joint venture and subsidiaries		—		—		—		—		—			—			—			—			—			(23,325	)		(23,325	)
- Appropriations to reserves		—		—		398,750		665,965		—			—			—			(1,064,715	)		—			—			—
- Dividends		—		—		—		—		—			—			—			(1,229,600	)		(1,229,600	)		(1,871	)		(1,231,471	)
- Acquisition of non-controlling interests		—		—		—		—		—			—			—			(4,431	)		(4,431	)		4,417			(14	)
Total transactions with owners		—		—		398,750		665,965		—			—			—			(2,298,746	)		(1,234,031	)		(20,779	)		(1,254,810	)
Balance at December 31, 2010		4,918,400		2,981,002		3,660,624		3,870,420		192,478			87,523			30,488			21,590,951			37,331,886			106,565			37,438,451
Balance at January 1, 2011		4,918,400		2,981,002		3,660,624		3,870,420		192,478			87,523			30,488			21,590,951			37,331,886			106,565			37,438,451
Profit for the year		—		—		—		—		—			—			—			8,928,102			8,928,102			47,505			8,975,607
Other comprehensive income :
- Fair value change of available-for-sale investments		—		—		—		—		—			(15,573	)		—			—			(15,573	)		—			(15,573	)
- Cash flow hedge reserve recognized		—		—		—		—		—			—			(138,759	)		—			(138,759	)		—			(138,759	)
- Exchange difference arising on translation of foreign operations		—		—		—		—		(569,310	)		—			—			—			(569,310	)		—			(569,310	)
Total comprehensive income for the year		—		—		—		—		(569,310	)		(15,573	)		(138,759	)		8,928,102			8,204,460			47,505			8,251,965
Transactions with owners
- Appropriations to reserves		—		—		490,161		681,340		—			—			—			(1,171,501	)		—			—			—
- Dividends		—		—		—		—		—			—			—			(2,901,856	)		(2,901,856	)		(440	)		(2,902,296	)
- Acquisition of a subsidiary		—		—		—		—		—			—			—			—			—			536,930			536,930
Total transactions with owners		—		—		490,161		681,340		—			—			—			(4,073,357	)		(2,901,856	)		536,490			(2,365,366	)
Balance at December 31, 2011		4,918,400		2,981,002		4,150,785		4,551,760		(376,832	)		71,950			(108,271	)		26,445,696			42,634,490			690,560			43,325,050
Balance at January 1, 2012		4,918,400		2,981,002		4,150,785		4,551,760		(376,832	)		71,950			(108,271	)		26,445,696			42,634,490			690,560			43,325,050
Profit for the year		—		—		—		—		—			—			—			6,218,969			6,218,969			3,276			6,222,245
Other comprehensive income :
- Fair value change of available-for-sale investments		—		—		—		—		—			(4,442	)		—			—			(4,442	)		—			(4,442	)
- Cash flow hedge reserve recognized		—		—		—		—		—			—			55,054			—			55,054			—			55,054
- Exchange difference arising on translation of foreign operations		—		—		—		—		297,721			—			—			—			297,721			—			297,721
- Share of other comprehensive income of associates		—		—		—		—		—			90			—			—			90			—			90
Total comprehensive income for the year		—		—		—		—		297,721			(4,352	)		55,054			6,218,969			6,567,392			3,276			6,570,668
Transactions with owners
- Appropriations to reserves		—		—		645,219		423,618		—			—			—			(1,068,837	)		—			—			—
- Dividends		—		—		—		—		—			—			—			(2,803,488	)		(2,803,488	)		(47,095	)		(2,850,583	)
- Contribution from non-controlling interests		—		—		—		—		—			—			—			—			—			49,000			49,000
- Disposal of partial interests in Yancoal Australia		—		—		—		—		—			—			—			(430,971	)		(430,971	)		2,569,101			2,138,130
- Deferred Tax arising from the restructuring of Australian subsidiaries		—		—		—		—		—			—			—			(141,067	)		(141,067	)		—			(141,067	)
Total transactions with owners		—		—		645,219		423,618		—			—			—			(4,444,363	)		(3,375,526	)		2,571,006			(804,520	)
Balance at December 31, 2012		4,918,400		2,981,002		4,796,004		4,975,378		(79,111	)		67,598			(53,217	)		28,220,302			45,826,356			3,264,842			49,091,198

F-7

YANZHOU COAL MINING COMPANY LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

		Year ended December 31,
	NOTES	2012			2011			2010
		RMB’000			RMB’000			RMB’000
OPERATING ACTIVITIES
Profit before income taxes			6,346,182			12,520,986			12,477,335
Adjustments for:
Interest expenses			1,448,679			839,305			603,343
Interest income			(722,336	)		(357,708	)		(187,189	)
Dividend income			(3,702	)		(2,433	)		(4,504	)
Net unrealized foreign exchange (gain) losses			(1,366,698	)		244,655			(2,180,277	)
Depreciation of property, plant and equipment			2,819,404			2,266,017			2,426,626
Release of prepaid lease payments			18,363			19,018			17,958
Amortization of prepayment for resources compensation fees			—			3,355			3,949
Bargain purchase			(1,269,269	)		—			—
Amortization of intangible assets			1,177,595			720,008			349,655
Provision (reversal) of impairment loss on accounts receivable and other receivables			6,452			(101	)		(4,923	)
Impairment loss on inventories			140,883			—			4,411
Impairment loss on property, plant and equipment			226,925			281,994			97,559
Impairment loss on intangibles assets			417,214			—			—
Impairment loss on goodwill			17,625			—			—
Share of loss of jointly controlled entities			103,217			—			—
Share of income of associates			(141,986	)		(68,939	)		(8,870	)
Gain on disposal of a joint venture and subsidiaries			—			—			(117,928	)
Loss on fair value change of contingent value rights shares liabilities			79,423			—			—
(Gain) loss on disposal of property, plant and equipment			(9,862	)		108,627			16,937
Written off of property, plant and equipment			—			—			1,491
Operating cash flows before movements in working capital			9,288,109			16,574,784			13,495,573
(Increase) decrease in bills and accounts receivable			(93,403	)		2,800,237			(5,286,147	)
(Increase) decrease in inventories			(58,993	)		403,324			(728,026	)
Movement in land subsidence, restoration, rehabilitation and environmental cost			484,739			556,706			838,510
Movement in overburden cost			(180,497	)		(121,690	)		224,546
Increase in prepayments and other current assets			(186,137	)		(870,492	)		(694,726	)
Increase (decrease) in bills and accounts payable			246,081			537,775			(160,240	)
Increase in other payables and accrued expenses			412,693			531,298			153,893
(Decrease) increase in long-term payable and provision			(93,090	)		(16,327	)		5,654
Cash generated from operations			9,819,502			20,395,615			7,849,037
Income taxes paid			(2,684,720	)		(2,155,602	)		(2,038,697	)
Interest paid			(1,296,338	)		(608,601	)		(602,743	)
Interest received			645,840			343,431			187,561
Dividend received			3,702			2,433			4,646
Dividend received from an associate			15,624			—			—
NET CASH FROM OPERATING ACTIVITIES			6,503,610			17,977,276			5,399,804

F-8

YANZHOU COAL MINING COMPANY LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS—Continued

			Year ended December 31,
	NOTES		2012			2011			2010
			RMB’000			RMB’000			RMB’000
INVESTING ACTIVITIES
Decrease (increase) in term deposits				6,356,257			(6,975,492	)		648,975
Purchase of property, plant and equipment				(6,230,426	)		(8,619,515	)		(3,576,136	)
Decrease (increase) in restricted cash				223,525			1,002,057			(874,643	)
Increase in long term receivables				(349,217	)		(300,083	)		—
Increase in deposit made on investments				(695,574	)		(394,128	)		(3,125,753	)
Proceeds on disposal of property, plant and equipment				226,876			57,956			205,446
Acquisition of non-controlling interests of Shanxi Tianhao				—			—			(14	)
Acquisition of Beisu and Yangcun		45		(816,011	)		—			—
Acquisition of Gloucester		46		237,315			—			—
Acquisition of three subsidiaries		47		—			—			(133,000	)
Investments in securities				—			(169,121	)		(16,257	)
Investments in associates				(810,000	)		(540,000	)		(125,000	)
Acquisition of An Yuan Coal Mine		48		—			(355,000	)		—
Acquisition of additional interests in a joint venture		49		—			(1,494,767	)		—
Acquisition of Syntech		50		—			(1,316,174	)		—
Acquisition of Premier Coal and Wesfarmers Char		51		—			(2,057,276	)		—
Acquisition of Xintai		52		—			(2,751,557	)		—
Proceeds on disposal of a joint venture and subsidiaries		53		—			—			1,147,821
Acquisition of potash mineral exploration permits				—			(1,645,227	)		—
Purchase of intangible assets				(1,330,117	)		(52,648	)		(35,352	)
Purchase of land use rights				—			—			(442	)
NET CASH USED IN INVESTING ACTIVITIES				(3,187,372	)		(25,610,975	)		(5,884,355	)
FINANCING ACTIVITIES
Dividends paid				(2,803,488	)		(2,901,856	)		(1,229,600	)
Proceeds from bank borrowings				12,281,525			16,712,320			1,110,954
Repayment of bank borrowings				(17,338,107	)		(4,367,079	)		(655,528	)
Repayment of other borrowings				(2,225,731	)		—			(584,478	)
Expenses arising from acquisition of Gloucester				(33,867	)		—			—
Proceeds from issuance of guaranteed notes				11,262,900			—			—
Dividends paid to non-controlling interests of a subsidiary				(47,095	)		(2,408	)		(1,871	)
Contribution from non-controlling interests				49,000			—			—
NET CASH FROM (USED IN) FINANCING ACTIVITIES				1,145,137			9,440,977			(1,360,523	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS				4,461,375			1,807,278			(1,845,074	)
CASH AND CASH EQUIVALENTS, AT JANUARY 1				8,145,297			6,771,314			8,522,399
EFFECT OF FOREIGN EXCHANGE RATE CHANGES				110,686			(433,295	)		93,989
CASH AND CASH EQUIVALENTS, AT DECEMBER 31, REPRESENTED BY BANK BALANCES AND CASH				12,717,358			8,145,297			6,771,314

F-9

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL

Organization and principal activities

Yanzhou Coal Mining Company Limited (the “Company”) is established as a joint stock company with limited liability in the People’s Republic of China (the “PRC”). In April 2001, the status of the Company was changed to that of a Sino-foreign joint stock limited company. The Company’s A shares are listed on the Shanghai Stock Exchange (“SSE”), its H shares are listed on The Stock Exchange of Hong Kong (the “SEHK”), and its American Depositary Shares (“ADS”, one ADS represents 10 H shares) are listed on the New York Stock Exchange, Inc. The address of the registered office and principal place of business of the Company is 298 Fushan South Road, Zoucheng, Shandong Province, PRC.

The Company operates eight coal mines, namely the Xinglongzhuang coal mine, Baodian coal mine, Nantun coal mine, Dongtan coal mine, Jining II coal mine (“Jining II”), Jining III coal mine (“Jining III”), Beisu coal mine (“Beisu”) and Yangcun coal mine (“Yangcun”) as well as a regional rail network that links these mines with the national rail network. The Company’s parent and ultimate holding company is Yankuang Group Corporation Limited (the “Parent Company”), a state-owned enterprise in the PRC.

The principal activities of the Company’s associates, joint controlled entities and joint ventures are set out in notes 29, 32 and 33 respectively.

As at December 31, 2012, the Group had net current assets of RMB1,659,691,000 (2011: net current liabilities of RMB4,290,365,000) and total assets less current liabilities of RMB94,079,634,000 (2011: RMB62,430,120,000).

Acquisitions and establishment of major subsidiaries

In 2006, the Company acquired 98% equity interest in Yankuang Shanxi Neng Hua Company Limited (“Shanxi Neng Hua”) and its subsidiaries (collectively referred as the “Shanxi Group”) from the Parent Company at cash consideration of RMB733,346,000. In 2007, the Company further acquired the remaining 2% equity interest in Shanxi Neng Hua from a subsidiary of the Parent Company at cash consideration of RMB14,965,000. The principal activities of Shanxi Group are to invest in heat and electricity, manufacture and sale of mining machinery and engine products, coal mining and the development of integrated coal technology.

F-10

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

1. GENERAL—Continued

Acquisitions and establishment of major subsidiaries—Continued

Shanxi Neng Hua is an investment holding company, which holds 81.31% equity interest in Shanxi Heshun Tianchi Energy Company Limited (“Shanxi Tianchi”) and approximately 99.85% equity interest in Shanxi Tianhao Chemical Company Limited (“Shanxi Tianhao”). In 2010, Shanxi Neng Hua acquired approximately 0.04% equity interest of Shanxi Tianhao at cash consideration of RMB14,000. The principal activities of Shanxi Tianchi are to exploit and sale of coal from Tianchi Coal Mine, the principal asset of Shanxi Tianchi. Shanxi Tianchi has completed the construction of Tianchi Coal Mine and commenced production by the end of 2006. Shanxi Tianhao is established to engage in the production of methanol and other chemical products, coke production, exploration and sales. The construction of the methanol facilities by Shanxi Tianhao commenced in March 2006 and it has commenced production in 2008.

In 2004, the Company acquired 95.67% equity interest in Yanmei Heze Company Limited (“Heze”) from the Parent Company at cash consideration of RMB584,008,000. The principal activities of Heze are to exploit and sale of coal in Juye coal field. The equity interests held by the Company increased to 96.67% after the increase of the registered capital of Heze in 2007. The equity interests held by the Company increased to 98.33% after the increase of the registered capital of RMB1.5 billion in 2010.

The Company originally held 97% equity interest in Yanzhou Coal Yulin Power Chemical Co., Ltd. (“Yulin”). The Company acquired the remaining 3% equity interest and made further investment of RMB600,000,000 in Yulin in 2008.

In February 2009, the Company acquired a 74% equity interest in Shandong Hua Ju Energy Company Limited (“Hua Ju Energy”) from the Parent Company at a consideration of RMB593,243,000. Hua Ju Energy is a joint stock limited company established in the PRC with the principal business of the supply of electricity and heat by utilizing coal gangue and coal slurry produced from coal mining process. In July 2009, the Company entered into acquisition agreements with three shareholders of Hua Ju Energy, pursuant to which, the Company agreed to acquire 21.14% equity interest in Hua Ju Energy at a consideration of RMB173,007,000.

In 2009, the Company entered into a binding scheme implementation agreement with Felix Resources Limited (“Felix”), a corporation incorporated in Australia with shares listed on the Australian Securities Exchange (“ASX”), to acquire all the shares of Felix in cash of approximately AUD3,333 million. The principal activities of Felix are exploring and extracting coal resources, operating, identifying, acquiring and developing resource related projects that primarily focus on coal in Australia. This acquisition was completed in 2009. In 2011, Felix Resources Limited was renamed as Yancoal Resources Limited (“Yancoal Resources”).

In 2009, the Company invested RMB500 million to set up a wholly-owned subsidiary located in Inner Mongolia, Yanzhou Coal Ordos Neng Hua Company Limited (“Ordos”). Ordos is a limited liability company incorporated in the PRC with the objectives of production and sale of methanol and other chemical products. In 2011, the Company invested additional equity in the registered capital of Ordos of RMB2.6 billion. The Company also acquired Yiginhuoluo Qi Nalin Tao Hai Town An Yuan Coal Mine (“An Yuan Coal Mine”) at a consideration of RMB1,435,000,000.

F-11

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

1. GENERAL—Continued

Acquisitions and establishment of major subsidiaries—Continued

In 2010, the Company acquired 100% equity interest of Inner Mongolia Yize Mining Investment Co., Ltd (“Yize”) and other two companies at a consideration of RMB190,095,000. The main purpose of this acquisition is to facilitate the business of methanol and other chemical products in Inner Mongolia Autonomous Region.

In 2011, Ordos acquired 80% equity interest of Inner Mongolia Xintai Coal Mining Company Limited (“Xintai”) at a consideration of RMB2,801,557,000 from an independent third party. Xintai owns and operates Wenyu Coal Mine in Inner Mongolia. The principal activities of Xintai are coal production and coal sales.

In 2011, the Company acquired 100% equity interests in Syntech Holdings Pty Ltd and Syntech Holdings II Pty Ltd (collectively “Syntech”) at a cash consideration of AUD208,480,000. The principal activities of Syntech include exploration, production, sorting and processing of coal. The acquisition was completed on August 1, 2011.

The Company entered into a sales and purchases agreement on September 27, 2011 to acquire 100% equity interests in both Wesfarmers Premier Coal Limited (“Premier Coal”) and Wesfarmers Char Pty Ltd (“Wesfarmers Char”) at a consideration of AUD313,533,000. The acquisition was completed on December 30, 2011. Premier Coal is mainly engaged in the exploration, production and processing of coal. Wesfarmers Char is mainly engaged in the research and development of the technology and procedures in relation to processing coal char from low rank coals.

In 2011, the Company invested USD2.8 million to set up a wholly-owned subsidiary, Yancoal International (Holding) Co., Limited (“Yancoal International”). Yancoal International was established in Hong Kong to act as a platform for overseas assets and business management. Yancoal International has four subsidiaries, namely Yancoal International Trading Co., Limited, Yancoal International Technology Development Co., Limited, Yancoal International Resources Development Co., Limited and Yancoal Luxembourg Energy Holding Co., Limited (“Yancoal Luxembourg”). Yancoal Luxembourg established a wholly-owned subsidiary, Yancoal Canada Resources Co., Ltd (“Yancoal Canada”) with USD290 million as investment. The Company acquired, at a total consideration of USD260 million, 19 potash mineral exploration permits in the Province of Saskatchewan, Canada through Yancoal Canada. The permit transfer registrations were completed on September 30, 2011.

On December 22, 2011 and March 5, 2012, the Company, Yancoal Australia Limited (“Yancoal Australia”) and Gloucester Coal Limited (“Gloucester”), a corporation incorporated in Australia whose shares are listed on the ASX, entered into the merger proposal deed in respect of a proposal for the merger of Yancoal Australia and Gloucester. Yancoal Australia acquired the entire issued share capital of Gloucester at a consideration of a combination of 218,727,665 ordinary shares of Yancoal Australia and 87,645,184 contingent value rights shares (“CVR shares”). Following the completion of the merger, Yancoal Australia is separately listed on the ASX, replacing the listing position of Gloucester. The merger was completed on June 27, 2012. The ordinary shares and CVR shares of Yancoal Australia was listed on the ASX on June 28, 2012. On June 22, 2012, according to the merger agreement, the equity interest in Syntech and Premier Coal held by Yancoal Australia has been transferred to Yancoal International.

F-12

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

1. GENERAL—Continued

Acquisitions and establishment of major subsidiaries—Continued

On April 23, 2012, the Company entered into an assets transfer agreement with the Parent Company and its subsidiary to purchase the target assets from the Parent Company and its subsidiary at a consideration of RMB824,142,000 to acquire all the assets and liabilities of Beisu and Yangcun and their equity investments in Zoucheng Yankuang Beisheng Industry & Trading Co., Ltd (“Beisheng Industry and Trade”), Shandong Shengyang Wood Co., Ltd (“Shengyang Wood”) and Jining Jiemei New Wall Materials Co., Ltd (“Jiemei Wall Materials”). Beisu and Yangcun mainly engaged in the production and exploration of PCI coal and thermal coal. The acquisition was completed on May 31, 2012.

During the year, the Company entered into an agreement for investment in Shandong Coal Trading Centre Co., Limited (“Trading Centre”) with two third parties. The Company contribute RMB51,000,000 which represents 51% of the equity interest in Trading Centre. The principal activities of Trading Centre is to provide coal trading and relevant advisory services. Trading Centre has not yet commenced any business.

2. BASIS OF PREPARATION

The accompanying consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. The consolidated financial statements were approved and authorized for issue by the Board of Directors on April 29, 2013.

The consolidated financial statements are presented in Renminbi (“RMB”), which is also the functional currency of the Company.

3. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

In the current year, the Group has applied, for the first time the following revised standard (“new IFRSs”) applicable to the Group issued by the International Accounting Standards Board (the “IASB”) and the International Financial Reporting Interpretations Committee (the IFRIC) of IASB, which are effective for the Group’s financial year beginning from January 1, 2012.

IFRS 7 (Amendments) Disclosures – Transfers of Financial Assets

The accounting policies adopted for the current year are the same as those adopted for the Group’s financial statements for the year ended December 31, 2011.

The adoption of the new IFRSs had no material impact on the results or financial position of the Group for the current or prior accounting year. Accordingly, no prior period adjustment has been required.

F-13

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

3. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS—Continued

The Group has not early applied the following new and revised standards, amendments or interpretations that have been issued but are not yet effective.

IFRSs (Amendments)	Annual Improvements to IFRSs 2009-2011 Cycle1
IFRS 7 (Amendments)	Disclosures – Offsetting Financial Assets and Financial Liabilities1
IFRS 9	Financial Instruments2
IFRS 10	Consolidated Financial Statements1
IFRS 11	Joint Arrangements1
IFRS 12	Disclosure of Interests in Other Entities1
IFRS 10, IFRS 11 and IFRS 12 (Amendments)	Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance1
IFRS 13	Fair Value Measurement1
IAS 1 (Amendments)	Presentation of Items of Other Comprehensive Income3
IAS 19 (Revised)	Employee Benefits1
IAS 28 (Revised)	Investments in Associates and Joint Ventures1
IAS 32 (Revised)	Offsetting Financial Assets and Financial Liabilities4
IFRIC 20	Stripping Costs in the Production Phase of a Surface Mine1

¹  Effective for annual periods beginning on or after January 1, 2013.

²  Effective for annual periods beginning on or after January 1, 2015.

³  Effective for annual periods beginning on or after July 1, 2012.

⁴  Effective for annual periods beginning on or after January 1, 2014.

• IFRS 9 Financial instruments

Under IFRS 9, all recognized financial assets that are within the scope of IAS 39 Financial Instruments: Recognition and Measurement are subsequently measured at either amortised cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortised cost at the end of subsequent accounting periods. All other debt investments and equity investments are measured at their fair values at the end of subsequent accounting periods.

In relation to financial liabilities, the significant change relates to financial liabilities that are designated as at fair value through profit or loss. Specifically, under IFRS 9, for financial liabilities that are designated as at fair value through profit or loss, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is presented in other comprehensive income, unless the presentation of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability’s credit risk are not subsequently reclassified to profit or loss. Previously, under IAS 39, the entire amount of the change in the fair value of the financial liability designated as at fair value through profit or loss was presented in profit or loss.

F-14

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

3. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS—Continued

• IFRS 10 Consolidated Financial Statements

IFRS 10 replaces the consolidation guidance in IAS 27 Consolidated and Separate Financial Statements and SIC-12 Consolidation—Special Purpose Entities by introducing a single consolidation model for all entities based on control, irrespective of the nature of the investee (i.e., whether an entity is controlled through voting rights of investors or through other contractual arrangements as is common in special purpose entities). Under IFRS 10, control is based on whether an investor has 1) power over the investee; 2) exposure, or rights, to variable returns from its involvement with the investee; and 3) the ability to use its power over the investee to affect the amount of the returns.

• IFRS 11 Joint Arrangements

IFRS 11 introduces new accounting requirements for joint arrangements, replacing IAS 31 Interests in Joint Ventures. The option to apply the proportional consolidation method when accounting for jointly controlled entities is removed. Additionally, IFRS 11 eliminates jointly controlled assets to now only differentiate between joint operations and joint ventures. A joint operation is a joint arrangement whereby the parties that have joint control have rights to the assets and obligations for the liabilities. A joint venture is a joint arrangement whereby the parties that have joint control have rights to the net assets.

• IFRS 12 Disclosures of Involvement with Other Entities

IFRS 12 requires enhanced disclosures about both consolidated entities and unconsolidated entities in which an entity has involvement. The objective of IFRS 12 is to require information so that financial statement users may evaluate the basis of control, any restrictions on consolidated assets and liabilities, risk exposures arising from involvements with unconsolidated structured entities and non-controlling interest holders’ involvement in the activities of consolidated entities.

• IFRS 13 Fair Value Measurement

IFRS 13 applies when another IFRS requires or permits fair value measurements or disclosures about fair value measurements (and measurements, such as fair value less costs to sell, based on fair value or disclosures about those measurements), except for certain exemptions. IFRS 13 requires the disclosures of fair values through a ‘fair value hierarchy’. The hierarchy categorizes the inputs used in valuation techniques into three levels. The hierarchy gives the highest priority to (unadjusted) quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure fair value are categorized into different levels of the fair value hierarchy, the fair value measurement is categorized in its entirety in the level of the lowest level input that is significant to the entire measurement.

F-15

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

3. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS—Continued

• IAS 1 (Amendments) Presentation of Items of Other Comprehensive Income

IAS 1 (Amendments) retain the option to present profit or loss and other comprehensive income in either a single statement or in two separate but consecutive statements. However, IAS 1 (Amendments) require additional disclosures to be made in the other comprehensive income section such that items of other comprehensive income are grouped into two categories: (a) items that will not be reclassified subsequently to profit or loss; and (b) items that may be reclassified subsequently to profit or loss when specific conditions are met. Income tax on items of other comprehensive income is required to be allocated on the same basis. IAS 1 (Amendments) are effective for annual periods beginning on or after July 1, 2012. The presentation of items of other comprehensive income will be modified accordingly when the amendments are applied in the future accounting periods.

• IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine applies to waste removal costs that are incurred in surface mining activity during the production phase of the mine (“production stripping costs”). Under the Interpretation, the costs from this waste removal activity (“stripping”) which provide improved access to ore are recognized as a non-current asset (“stripping activity asset”) when certain criteria are met, whereas the costs of stripping activities where the benefit is realised in the form of inventory produced are accounted for in accordance with IAS 2 Inventories. The stripping activity asset is accounted for as an addition to, or as an enhancement of, an existing asset and classified as tangible or intangible according to the nature of the existing asset of which it forms part. When the costs of the stripping activity asset and the inventory produced are not separately identifiable, production stripping costs are allocated between the inventory produced and the stripping activity asset by using an allocation basis that is based on a relevant production measure. IFRIC 20 is effective for annual periods beginning on or after January 1, 2013. Under the existing policy, the Company separately present the striping costs on the balance sheet. Upon the subsequent adoption of the Interpretation, the presentation on the balance sheet will be amended accordingly.

The directors considered that except for the abovementioned standards or interpretations, the application of other standards or interpretations will have no material impact to the Group’s financial statements.

F-16

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments, which are stated at fair value. The accounting policies are set out below.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and all entities controlled by the Company (including special purpose entities). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

Income and expenses of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by other members of the Group.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to owners of the Company.

Business combination

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of assets transferred by the Group, liabilities incurred by the Group to former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognized in profit or loss as incurred.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Subsequent adjustments to the consideration are recognized against the cost of acquisition within the measurement period which does not exceed one year from the acquisition date. Subsequent accounting for changes in fair values of the contingent consideration that do not qualify as measurement period adjustments is included in the income statement or within equity for contingent consideration classified as an asset/liability and equity respectively.

F-17

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. SIGNIFICANT ACCOUNTING POLICIES—Continued

Business combination—Continued

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after assessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held interest in the acquiree (if any), the excess is recognized immediately in profit or loss as a bargain purchase gain.

Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests’ proportionate share of the recognized amounts of the acquiree’s identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. The Group applies the non-controlling interests’ proportionate share of the recognized amounts of the acquiree’s identifiable net assets to account for all its acquisitions.

Combinations of businesses under common control are accounted for using the acquisition method, which is consistent with the accounting treatment for all other acquisitions of businesses. The principles and details of this accounting treatment are set out above.

Interests in associates

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

The results and assets and liabilities of associates are incorporated in these consolidated financial statements using the equity method. Under the equity method, investments in associates are carried in the consolidated balance sheet at cost and adjusted for post-acquisition changes in the Group’s share of net assets of the associates, less any identified impairment loss. When the Group’s share of losses of an associate equals or exceeds its interest in that associate (which includes any long-term interests that, in substance, form part of the Group’s net investment in the associate), the Group discontinues recognizing its share of further losses. Additional share of losses is provided for and a liability is recognized only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of that associate. If the associate subsequently reports profits, the Group resumes recognizing its share of those profits only after its share of the profits exceeds the accumulated share of losses that has previously not been recognized.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate recognized at the date of acquisition is recognized as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

F-18

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. SIGNIFICANT ACCOUNTING POLICIES—Continued

Interests in associates—Continued

The requirements of IAS 39 are applied to determine whether it is necessary to recognize any impairment loss with respect to the Group’s investment in associates. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with IAS 36 Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment and the reversal of that impairment loss is recognized in accordance with IAS 36 to the extent that the recoverable amount of the investment subsequently increases.

Where a group entity transacts with an associate of the Group, profits and losses are eliminated to the extent of the Group’s interest in the relevant associate.

Interests in joint ventures

A joint venture is a contractual arrangement whereby the Group and other parties undertake an economic activity that is subject to joint control (i.e. when the strategic financial and operating policy decisions relating to the activities of the joint venture require the unanimous consent of the parties sharing control).

When a group entity undertakes its activities under joint venture arrangements directly, the Group’s share of jointly controlled assets and any liabilities incurred jointly with other venturers are recognized in the financial statements of the relevant entity and classified according to their nature. Liabilities and expenses incurred directly in respect of interests in jointly controlled assets are accounted for on an accrual basis. Income from the sale or use of the Group’s share of the output of jointly controlled assets, and its share of joint venture expenses, are recognized when it is probable that the economic benefits associated with the transactions will flow to/from the Group and their amount can be measured reliably.

Joint venture arrangements that involve the establishment of a separate entity in which each venturer has an interest are referred to as jointly controlled entities. The Group reports its interests in jointly controlled entities using the equity method of accounting and the details of equity method of accounting have been set out in the accounting policy for interests in associates. When a group entity transacts with a jointly controlled entity of the Group, unrealized profits and losses are eliminated to the extent of the Group’s interest in the joint venture.

The Group’s share using proportionate consolidation of the assets, liabilities, revenue and expenses of other joint ventures (no separate entity has been established) are included in the appropriate items of the financial statements.

F-19

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. SIGNIFICANT ACCOUNTING POLICIES—Continued

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods sold and services provided in the normal course of business, net of discounts and sales related taxes. Provided it is probable that the economic benefits will flow to the Group and the revenue and costs, if applicable, can be measured reliably, revenue is recognized in profit or loss as follows:

Sales of goods (including coal and methanol) are recognized upon transfer of the significant risks and rewards of ownership to the customer. This is usually taken at the time when the goods are delivered and the customer has accepted the goods.

Service income such as coal railway transportation and electricity and heat supply is recognized when services are provided.

Interest income from a financial asset is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial assets to that asset’s net carrying amount.

Dividend income from investments is recognized when the shareholders’ rights to receive payments have been established.

Intangible assets (other than goodwill)

Intangible assets acquired separately

Intangible assets acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized over their estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each annual reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

Internally-generated intangible assets – research and development expenditure

Expenditure on research activities is recognized as an expense in the period in which it is incurred.

An internally-generated intangible asset arising from development expenditure is recognized only if it is anticipated that the development costs incurred on a clearly-defined project will be recovered through future commercial activity. The resultant asset is amortized on a straight line basis over its useful life. Expenditure incurred on projects to develop new products is capitalized only when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the project and the ability to measure reliably the expenditure during the development.

Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date (which is regarded as their cost).

F-20

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. SIGNIFICANT ACCOUNTING POLICIES—Continued

Intangible assets acquired in a business combination—Continued

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

(i) Mining reserves

Mining reserves represent the portion of total proven and probable reserves in the mine of a mining right. Mining reserves are amortized over the life of the mine on a unit of production basis of the estimated total proven and probable reserves or the Australia Joint Ore Reserves Committee (“JORC”) reserves for the Group’s subsidiaries in Australia. Changes in the annual amortization rate resulting from changes in the remaining reserves are applied on a prospective basis from the commencement of the next financial year.

(ii) Mining resources

Mining resources represent the fair value of economically recoverable reserves (excluding the portion of total proven and probable reserves of a mining right i.e. does not include the above mining reserves) of a mining right (Details are set out in the accounting policy of exploration and evaluation expenditure). When production commences, the mining resources for the relevant areas of interest are amortized over the life of the area according to the rate of depletion of the economically recoverable reserves.

(iii) Rail access rights

Rail access rights are amortized on a straight line basis or on a unit of production basis under agreement over the life of the mine.

Exploration and evaluation expenditure

Exploration and evaluation expenditure incurred is accumulated in respect of each separately identifiable area of interest which is at individual mine level. These costs are only carried forward where the right of tenure for the area of interest is current and to the extent that they are expected to be recouped through successful development and commercial exploitation, or alternatively, sale of the area, or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves and active and significant operations in, or in relation to, the area of interest are continuing.

The carrying amount of exploration and evaluation assets is assessed for impairment when facts or circumstances suggest the carrying amount of the assets may exceed their recoverable amount.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Accumulated costs in relation to an abandoned area are written-off in full in the period in which the decision to abandon the area is made.

When production commences, the accumulated costs for the relevant area of interest are amortized over the life of the area according to the rate of depletion of the economically recoverable reserves.

F-21

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. SIGNIFICANT ACCOUNTING POLICIES—Continued

Exploration and evaluation expenditure—Continued

Capitalized exploration and evaluation expenditure considered to be tangible is recorded as a component of property, plant and equipment. Otherwise, it is recorded as an intangible asset.

Exploration and evaluation expenditure acquired in a business combination are recognized at their fair value at the acquisition date (the fair value of potential economically recoverable reserves at the acquisition date which is shown as “Mining resources”)

Prepaid lease payments

Prepaid lease payments represent land use rights under operating lease arrangement and are stated at cost less accumulated amortization and accumulated impairment losses.

Property, plant and equipment

Property, plant and equipment, other than construction in progress and freehold land, are stated at cost less subsequent accumulated depreciation and accumulated impairment losses.

Depreciation is charged so as to write off the cost of items of property, plant and equipment, other than construction in progress and freehold land, over their estimated useful lives and after taking into account their estimated residual value, using the straight line method or unit of production method.

Construction in progress represents property, plant and equipment under construction for production or for its own use purposes. Construction in progress is carried at cost less any impairment loss. Construction in progress is classified to the appropriate category of property, plant and equipment when completed and ready for intended use. Depreciation commences when the assets are ready for their intended use.

Any gain or loss arising on the disposal of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the consolidated income statement.

Impairment other than goodwill

At each balance sheet date, the Group reviews the carrying amounts of its tangible assets and intangible assets with finite useful life to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset (determined at the higher of its fair value less costs to sell and its value in use) is estimated in order to determine the extent of the impairment loss (if any). Intangible assets with an indefinite useful life will be tested for impairment annually.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. Impairment loss is recognized as an expense immediately.

F-22

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. SIGNIFICANT ACCOUNTING POLICIES—Continued

Impairment other than goodwill—Continued

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but such that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognized as an income immediately.

For the purposes of impairment testing, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Assessment is performed for each area of interest in conjunction with the group of operating assets (representing a cash generating unit) to which the mining activity (mining complex level) is attributed. Management monitors and manages operations at the mining complex level to identify cash-generating streams.

Goodwill

Goodwill arising on acquisitions prior to January 1, 2005 (transition to new IFRS)

Goodwill arising on an acquisition of net assets and operations of another entity for which the agreement date is before January 1, 2005 represents the excess of the cost of acquisition over the Group’s interest in the fair value of the identifiable assets and liabilities of the relevant acquiree at the date of acquisition.

The Group has discontinued amortization from January 1, 2005 onwards, and such goodwill is tested for impairment annually, and whenever there is an indication that the cash-generating unit to which the goodwill relates may be impaired (see the accounting policy below).

Goodwill arising on acquisitions on or after January 1, 2005

Goodwill arising on an acquisition of a business for which the agreement date is on or after January 1, 2005 represents the excess of the cost of acquisition over the Group’s interest in the fair value of the identifiable assets, liabilities and contingent liabilities of the relevant business at the date of acquisition. Such goodwill is carried at cost less any accumulated impairment losses.

Goodwill is presented separately in the consolidated balance sheet.

For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated to reduce the carrying amount of any goodwill allocated to the unit first and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. Any impairment is recognized immediately in the consolidated income statement and is not subsequently reversed.

On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the gain or loss on disposal.

F-23

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. SIGNIFICANT ACCOUNTING POLICIES—Continued

Cash and cash equivalents

Cash and cash equivalents include cash at bank and in hand, demand deposits with banks and other financial institution and short term highly liquid investments with original maturities of three months or less that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. For the preparation of consolidated cash flow statement, cash and cash equivalents include bank overdrafts which are repayable on demand and form an integral part of the Group’s cash management.

Inventories

Inventories of coal and methanol are stated at the lower of cost and net realizable value. Cost, which comprises direct materials and, where applicable, direct labour and overheads that have been incurred in bringing the inventories to their present location and condition, is calculated using the weighted average method. Net realizable value represents the estimated selling price less all further costs to completion and costs to be incurred in selling, marketing and distribution.

Inventories of auxiliary materials, spare parts and small tools expected to be used in production are stated at weighted average cost less allowance, if necessary, for obsolescence.

Overburden in advance

The assumptions used by management to estimate saleable coal production, run-of-mine (ROM) coal tonnes mined, and the weighted average cost to remove a bank cubic metre (BCM) of waste include a range of geological, technical and economic factors, including quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity demand, commodity prices and exchange rates. Estimating the quantity and/or grade of reserves requires a determination of the size, shape and depth of ore bodies or fields by analyzing geological data such as drilling samples. Changes in reported reserves may affect overburden removal costs since the costs may change due to changes in stripping ratios or the units of production basis of depreciation. Any changes in estimates are reflected on a prospective basis.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the consolidated income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

F-24

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. SIGNIFICANT ACCOUNTING POLICIES—Continued

Taxation—Continued

Deferred tax liabilities are recognized for taxable temporary differences arising on investments in subsidiaries, interest in associates and joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited in the consolidated income statement, except when it relates to items that are recognized in other comprehensive income or directly in equity, in which case the deferred tax is also recognized in other comprehensive income or directly in equity respectively.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

The Company’s wholly-owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation regime. Each entity in the tax consolidated group recognizes its own deferred tax assets and liabilities, except where the deferred tax assets relate to unused tax losses and credits, in which case the Australian subsidiaries recognizes the assets. Australian subsidiaries have entered into a tax sharing agreement whereby each company of Australian subsidiaries contributes to the income tax payable in proportion to their contribution to the profit before tax of the tax consolidated group. The tax consolidated group has also entered into a tax funding agreement whereby each entity in Australian subsidiaries group can recognize their balance of the current tax assets and liabilities through inter-entity accounts.

Land subsidence, restoration, rehabilitation and environmental costs

One consequence of coal mining is land subsidence caused by the resettlement of the land above the underground mining sites. Depending on the circumstances, the Group may relocate inhabitants from the land above the underground mining sites prior to mining those sites or the Group may compensate the inhabitants for losses or damages from land subsidence after the underground sites have been mined. The Group may also be required to make payments for restoration, rehabilitation or environmental protection of the land after the underground sites have been mined.

An estimate of such costs is recognized in the period in which the obligation is identified and is charged as an expense in proportion to the coal extracted. At each balance sheet date, the Group adjusts the estimated costs in accordance with the actual land subsidence status. The provision is also adjusted for changes in estimates. Those adjustments are accounted for as a change in the corresponding capitalised cost, except where a reduction in the provision is greater than the undepreciated capitalised cost of any related assets, in which case the capitalised cost is reduced to nil and remaining adjustment is recognized in the income statement. Changes to the capitalised cost result in an adjustment to future depreciation and financial charges.

F-25

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. SIGNIFICANT ACCOUNTING POLICIES—Continued

Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Where the Group acquires the use of assets under finance leases, the amounts representing the fair value of the leased asset, or, if lower, the present values of the minimum lease payments of such assets are included in property, plant and equipment and the corresponding liabilities, net of finance charges, are recorded as an obligation under finance leases.

Each lease payment is allocated between liability and finance charges so as to achieve a constant rate of interest on the remaining balance of the liability. The finance lease liabilities are included in current and non-current borrowings. The finance charges are expensed in the income statement over the lease periods so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The assets accounted for as finance leases are depreciated over the shorter of their estimated useful lives or the lease periods.

Operating lease payments are recognized as an expense on a straight-line basis over the lease term. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred.

Provisions and contingent liabilities

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. Where the time value of money is material, provisions are stated at the present value of the expenditure expected to settle the obligation.

All provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future uncertain events not wholly within the control of the Group are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

F-26

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. SIGNIFICANT ACCOUNTING POLICIES—Continued

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalized as part of the cost of those assets. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. Capitalization of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or complete.

All other borrowings costs are recognized as expenses in the period in which they are incurred.

Foreign currencies

In preparing the financial statements of each individual group entity, transactions in currencies other than the functional currency of that entity (foreign currencies) are recorded in the respective functional currency (i.e., the currency of the primary environment in which the entity operates) at the rates of exchanges prevailing on the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are recognized in profit or loss in the period in which they arise.

For the purposes of presenting the consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated into the presentation currency of the Company (i.e. Renminbi) at the rate of exchange prevailing at the balance sheet date, and their income and expenses are translated at the average exchange rates for the year, unless exchange rates fluctuate significantly during the period, in which case, the exchange rates prevailing at the dates of transactions are used. Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in equity (attributed to non-controlling interests as appropriate). Such exchange differences are recognized in profit or loss in the period in which the foreign operation is disposed of.

Government grants

Government grants are recognized as income over the periods necessary to match them with the related costs. If the grants do not relate to any specific expenditure incurred by the Group, they are reported separately as other income. If the grants subsidize an expense incurred by the Group, they are deducted in reporting the related expense. Grants relating to depreciable assets are presented as a deduction from the cost of the relevant asset.

F-27

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. SIGNIFICANT ACCOUNTING POLICIES—Continued

Annual leave, sick leave and long service leave

Benefits accruing to employees in respect of wages and salaries, annual leave and sick leave are included in trade and other payables. Related on-costs are also included in trade and other payables as other creditors. Long service leave is provided for when it is probable that settlement will be required and it is capable of being measured reliably.

Employee benefits expected to be settled within 12 months are measured using the remuneration rate expected to apply at the time of settlement. Provisions made in respect of employee benefits which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to the balance sheet date.

Retirement benefit costs

Payments to defined contribution retirement benefit plans are charged as expenses when the employees render the services entitling them to the contributions.

Financial instruments

Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

Financial assets

The Group’s financial assets are classified into loans and receivables, financial assets at fair value through profit or loss and available-for-sale financial assets. All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace. The accounting policies adopted in respect of financial assets are set out below.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables (including bank balances and cash, term deposits, restricted cash, bills and accounts receivable, other current assets and long-term receivables) are subsequently measured at amortized cost using the effective interest method, less any identified impairment loss.

F-28

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. SIGNIFICANT ACCOUNTING POLICIES—Continued

Financial instruments—Continued

Financial assets—Continued

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss included financial assets held for trading and financial assets designated as fair value through profit or loss upon initial recognition. Financial assets are classified as held for trading if it is acquired principally for the purpose of selling or repurchasing it in the near term or on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual patter of short-term profit-taking.

Royalty receivable is remeasured based on sales volume, price changes, foreign currency exchange rates and expected future cash flows at each balance sheet date. The gain or loss arising from the change in fair value of royalty receivable is recognized in profit or loss. Royalty receivable is reduced by cash receipts and decreases with time. Since the contract is long term, the unwinding discount (to reflect time value of money) is recognized in interest income.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated or not classified as financial assets at fair value through profit or loss, loans and receivables or held-to-maturity investments.

At each balance sheet date subsequent to initial recognition, available-for-sale financial assets are measured at fair value. Changes in fair value are recognized initially in other comprehensive income and accumulated in equity, until the financial asset is disposed of or is determined to be impaired, at which time, the cumulative gain or loss previously recognized in equity is removed from equity and recognized in profit or loss (see accounting policy on impairment loss on financial assets below).

Available-for-sale equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost less any identified impairment losses at each balance sheet date subsequent to initial recognition (see accounting policy on impairment loss on financial assets below).

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the financial assets have been impacted.

For an available-for sale equity investment, a significant or prolonged decline in the fair value of that investment below its cost is considered to be objective evidence of impairment.

F-29

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. SIGNIFICANT ACCOUNTING POLICIES—Continued

Financial instruments—Continued

Financial assets—Continued

Impairment of financial assets—Continued

For all other financial assets, objective evidence of impairment could include:

• significant financial difficulty of the issuer or counterparty; or

• default or delinquency in interest or principal payments; or

• it becoming probable that the borrower will enter bankruptcy or financial re-organization.

For certain categories of financial asset, such as trade and bills receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments and changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortized cost, an impairment loss is recognized in profit or loss when there is objective evidence that the asset is impaired, and is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate.

For available-for-sale equity investments carried at cost, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade and bills receivables and other receivables, where the carrying amounts are reduced through the use of an allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss. When a trade and bills receivables and other receivables are considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited to profit or loss.

For financial assets measured at amortized cost, if, in a subsequent period, the amount of impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment losses was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

Impairment losses on available-for-sale equity investments will not be reversed in profit or loss in subsequent periods. Any increase in fair value subsequent to impairment loss is recognized initially in other comprehensive income and accumulated in equity.

F-30

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. SIGNIFICANT ACCOUNTING POLICIES—Continued

Financial instruments—Continued

Financial liabilities and equity

Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.

Financial liabilities

The Group’s financial liabilities including bills and accounts payables, other payables, amounts due to Parent Company and its subsidiary companies, finance lease liabilities, guaranteed notes and bank and other borrowings are subsequently measured at amortized cost, using the effective interest method and financial liabilities at fair value through profit or loss.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated at initial recognition as at fair value through profit and loss. Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term.

Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

Derecognition

Financial assets are derecognized when the rights to receive cash flows from the assets expire or, the financial assets are transferred and the Group has transferred substantially all the risks and rewards of ownership of the financial assets. On derecognition of a financial asset, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized directly in equity is recognized in profit or loss.

Financial liabilities are derecognized when the obligation specified in the relevant contract is discharged, cancelled or expired. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.

Accounting for derivative financial instruments and hedging activities

Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently re-measured at their fair value. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either: (i) hedges of the fair value of recognized assets or liabilities (fair value hedge); and (ii) hedges of highly probable forecast transactions (cash flow hedge).

F-31

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. SIGNIFICANT ACCOUNTING POLICIES—Continued

Financial instruments—Continued

Financial liabilities and equity—Continued

Accounting for derivative financial instruments and hedging activities—Continued

The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The Group also documents its assessment, both at the inception of the hedge and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of the hedged items.

The fair values of various derivative instruments used for hedging purposes are disclosed in note 38. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months.

(i) Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognized initially in other comprehensive income and accumulated in equity. The gain or loss relating to the ineffective portion is recognized immediately in the profit and loss. Amounts accumulated in equity are recognized in the profit and loss as the underlying hedged items are recognized.

Amounts previously recognized in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item is recognized in profit or loss.

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in the profit and loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the profit and loss.

(ii) Derivatives that do not qualify for hedge accounting and those not designated as hedging instruments

Changes in the fair value of any derivative instruments that do not qualify for hedge accounting and those not designated as hedges are recognized immediately in the profit and loss.

F-32

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. SIGNIFICANT ACCOUNTING POLICIES—Continued

Related Parties

(a) A person, or a close member of that person’s family, is related to the group if that person:

(1) has control or joint control over the group;

(2) has significant influence over the group; or

(3) is a member of the key management personnel of the group or the group’s parent.

Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity.

(b) An entity is related to the group if any of the following conditions applies:

(1) The entity and the group are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others);

(2) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member);

(3) Both entities are joint ventures of the same third party;

(4) One entity is a joint venture of a third entity and the other entity is an associate of the third entity;

(5) The entity is a post-employment benefit plan for the benefit of employees of either the group or an entity related to the group;

(6) The entity is controlled or jointly controlled by a person identified in (a); or

(7) A person identified in (a)(1) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

F-33

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

5. ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, which are described in note 4, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Depreciation of property, plant and equipment

The cost of mining structures is depreciated using the unit of production method based on the estimated production volume for which the structure was designed. The management exercises their judgment in estimating the useful lives of the depreciable assets and the production volume of the mine. The estimated coal production volumes are updated at regular intervals and have taken into account recent production and technical information about each mine. These changes are considered a change in estimate for accounting purposes and are reflected on a prospective basis in related depreciation rates. Estimates of the production volume are inherently imprecise and represent only approximate amounts because of the subjective judgements involved in developing such information.

Amortization of assets

Mining reserves, mining resources and rail access rights are amortized on a straight line basis or unit of production basis over the shorter of their useful lives and the contractual period. The expensing of overburden removal costs is based on saleable coal production over estimated economically recoverable reserves. The useful lives are estimated on the basis of the total proven and probable reserves of the mine. Proven and probable mining reserve estimates are updated at regular intervals and have taken into account recent production and technical information about each mine.

Provision for land subsidence, restoration, rehabilitation and environmental costs

The provision is reviewed regularly to verify that it properly reflects the remaining obligation arising from the current and past mining activities. Provision for land subsidence, restoration, rehabilitation and environmental costs are determined by the management based on their best estimates of the current and future costs, latest government policies and past experiences.

Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate the present value. As at December 31, 2012, the carrying amount of goodwill is RMB2,573,811,000 (2011: RMB1,866,037,000). During the year ended December 31, 2012, impairment loss on goodwill of RMB17,625,000 (2011: nil; 2010: nil) was recognised by the Group and details are set out in note 27.

F-34

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

5. ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY—Continued

Impairment of goodwill—Continued

Cash flow projections during the budget period for each of the above units are based on the budgeted revenue and expected gross margins during the budget period and the raw materials price inflation during the budget period. Expected cash inflows/outflows have been determined based on past performance and management’s expectations for the market development.

Estimated impairment of property, plant and equipment

When there is an impairment indicator, the Group takes into consideration the estimation of future cash flows. The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows. Where the actual future cash flows are less than expected, a material impairment loss may arise. In estimating the future cash flows, the management have taken into account the recent production and technical advancement. As prices and cost levels change from year to year, the estimate of the future cash flow also changes. Notwithstanding the management has used all the available information to make their impairment assessment, inherent uncertainty exists on conditions of the mine and of the environment and actual written off may be higher than the amount estimated. As at December 31, 2012, the carrying amounts of property, plant and equipment is approximately RMB39,503,103,000 (2011: RMB31,273,824,000). During the year ended December 31, 2012, no property, plant and equipment was written off as expenses (2011: nil; 2010: RMB1,491,000). In addition, during the year ended December 31, 2012, impairment loss on property, plant and equipment of RMB226,925,000 (2011: RMB281,994,000; 2010: RMB97,559,000) was recognized by the Group and details of this impairment are set out in note 25.

Most of the coal sales by Premier and Wesfarmers Char are governed by a contract signed with an independent power station. The remaining coal sales are to independent third parties which are sold at market prices. The contract with the power station was a required condition in order for the government to grant the mining rights to Premier and Wesfarmers Char. The sales price under the contract is below market price and Premier and Wesfarmers Char are unable to negotiate to revise the terms of the existing contract, including the sale price of coal. Given the current level of market price of coal and rising costs, the Company also expect that the power station may purchase more coal from Premier and Wesfarmers Char, which will drive down the Company’s overall average sales prices. As a result, a combined assessment of Premier and Wesfarmers Char, being a cash-generating unit, was performed, and as a result, the Company recorded impairment on intangible assets (mining reserves and mining resources) of RMB417,214,000, property, plant and equipment (mining structures) of RMB226,925,000 and goodwill of RMB17,625,000 as selling, general and administrative expenses in its statement of comprehensive income as set out in Note 9 to the financial statements. The Company used the value-in-use method to assess the impairment and the key assumptions included the future market price of the coal, sales volume, and mining costs. The changes in these key assumptions that were applied in the impairment analysis were a decrease of the average coal price from AUD76 per tonne to AUD24 per tonne, a decrease in total sales volume from 141 million tonne to 58 million tonne, an increase in average nominal operating cost from AUD48 per tonne to AUD62 per tonne and an increase in capital expenditure from AUD460 million to AUD584 million.

In the process of applying the Group’s accounting policies, management has made the following accounting judgements:

Acquisitions

During the year, the Group acquired several subsidiaries and businesses as set out in notes 45 and 46. The Group determined whether the acquisitions are to be accounted for as acquisition of businesses or as acquisition of assets by reference to a number of factors including (i) whether the acquiree has relevant input, process or output; (ii) whether the acquire has planned principal activities or is pursuing a plan to produce output and will be able to obtain access to customers.

In addition, the management also made judgement to determine if the Group has taken control over the subsidiaries or assets acquired as from time to time, the registration of transfer of certain operating licences may not be changed immediately upon the payment of consideration.

F-35

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

6. SEGMENT INFORMATION

The Group is engaged primarily in the mining business. The Group is also engaged in the coal railway transportation business. The Company does not currently have direct export rights in the PRC and all of its 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”). The exploitation right of the Group’s foreign subsidiaries is not restricted. The final customer destination of the Company’s export sales is determined by the Company, National Coal Corporation, Minmetals Trading or Shanxi Coal Corporation. Certain of the Company’s subsidiaries and associates are engaged in trading and processing of mining machinery and the transportation business via rivers and lakes and financial services in the PRC. No separate segment information about these businesses is presented in these financial statements as the underlying gross sales, results and assets of these businesses, which are currently included in the mining business segment, are insignificant to the Group. Certain of the Company’s subsidiaries are engaged in production of methanol and other chemical products, and invest in heat and electricity.

Gross revenue disclosed below is same as the turnover.

For management purposes, the Group is currently organized into three operating divisions - coal mining, coal railway transportation and methanol, electricity and heat supply. These divisions are the basis on which the Group reports its segment information.

Principal activities are as follows:

Mining	-	Underground and open-cut mining, preparation and sales of coal and potash mineral exploration
Coal railway transportation	-	Provision of railway transportation services
Methanol, electricity and heat supply	-	Production and sales of methanol and electricity and related heat supply services

F-36

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

6. SEGMENT INFORMATION—Continued

The accounting policies of the reportable segments are the same as the Group’s accounting policies described in note 4. Segment results represents the results of each segment without allocation of corporate expenses and directors’ emoluments, results of associates, interest income, interest expenses and income tax expenses. This is the measure reported to the chief operating decision maker for the purposes of resources allocation and assessment of segment performance.

Segment information about these businesses is presented below:

INCOME STATEMENT

	For the year ended December 31, 2012
	Mining		Coal railway transportation		Methanol, electricity and heat supply		Eliminations			Consolidated
	RMB’000		RMB’000		RMB’000		RMB’000			RMB’000
GROSS REVENUE
External		56,200,600		464,068		1,481,516		—			58,146,184
Inter-segment		219,230		32,560		284,425		(536,215	)		—
Total		56,419,830		496,628		1,765,941		(536,215	)		58,146,184

Inter-segment revenue is charged at prices pre-determined by the relevant governmental authority.

	For the year ended December 31, 2012
	Mining			Coal railway transportation			Methanol, electricity and heat supply		Eliminations		Consolidated
	RMB’000			RMB’000			RMB’000		RMB’000		RMB’000
RESULT
Segment results		7,168,026			(52,848	)		91,420		—		7,206,598
Unallocated corporate expenses												(2,159,979	)
Unallocated corporate income												1,987,137
Interest income												722,336
Share of profit of associates		33,552			—			108,434		—		141,986
Share of loss of jointly controlled entities		(103,217	)		—			—		—		(103,217	)
Interest expenses												(1,448,679	)
Profit before income taxes												6,346,182
Income taxes												(123,937	)
Profit for the year												6,222,245

F-37

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

6. SEGMENT INFORMATION—Continued

BALANCE SHEET

	At December 31, 2012
	Mining		Coal railway transportation		Methanol, electricity and heat supply		Consolidated
	RMB’000		RMB’000		RMB’000		RMB’000
ASSETS
Segment assets		98,803,732		558,152		5,300,584		104,662,468
Interests in associates		192,081		—		2,432,195		2,624,276
Interests in jointly controlled entities		1,086,985		—		—		1,086,985
Unallocated corporate assets								14,328,594
								122,702,323
LIABILITIES
Segment liabilities		30,823,224		66,649		4,326,014		35,215,887
Unallocated corporate liabilities								38,395,238
								73,611,125

OTHER INFORMATION

	For the year ended December 31, 2012
	Mining		Coal railway transportation		Methanol, electricity and heat supply			Corporate		Consolidated
	RMB’000		RMB’000		RMB’000			RMB’000		RMB’000
Capital additions (note 1)		19,170,069		33,835		1,605,265			70		20,809,239
Investments in associates		3,927		—		810,000			—		813,927
Amortization of intangible assets		1,175,548		—		2,047			—		1,177,595
Release of prepaid lease payments		9,778		5,372		3,213			—		18,363
Impairment loss on property, plant and equipment		226,925		—		—			—		226,925
Impairment loss on intangible assets		417,214		—		—			—		417,214
Write-off on inventories		140,883		—		—			—		140,883
Impairment loss on goodwill		17,625		—		—			—		17,625
Depreciation of property, plant and equipment		2,293,828		78,668		443,746			3,162		2,819,404
Impairment losses (reversed) charged on accounts receivable and other receivables		7,270		—		(818	)		—		6,452

Note 1: Capital additions include those arising from the acquisition of assets under the asset transfer agreement with the Parent Company and its subsidiary and the acquisition of Gloucester during the year.

F-38

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

6. SEGMENT INFORMATION—Continued

INCOME STATEMENT

	For the year ended December 31, 2011
	Mining		Coal railway transportation		Methanol, electricity and heat supply		Eliminations			Consolidated
	RMB’000		RMB’000		RMB’000		RMB’000			RMB’000
GROSS REVENUE
External		45,181,229		476,852		1,407,759		—			47,065,840
Inter-segment		287,280		51,705		256,364		(595,349	)		—
Total		45,468,509		528,557		1,664,123		(595,349	)		47,065,840

Inter-segment revenue is charged at prices pre-determined by the relevant governmental authority.

	For the year ended December 31, 2011
	Mining		Coal railway transportation		Methanol, electricity and heat supply			Eliminations		Consolidated
	RMB’000		RMB’000		RMB’000			RMB’000		RMB’000
RESULT
Segment results		13,476,481		479		(365,011	)		—		13,111,949
Unallocated corporate expenses											(699,291	)
Unallocated corporate income											520,986
Interest income											357,708
Share of profit of associates		43,124		—		25,815			—		68,939
Interest expenses											(839,305	)
Profit before income taxes											12,520,986
Income taxes											(3,545,379	)
Profit for the year											8,975,607

F-39

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

6. SEGMENT INFORMATION—Continued

BALANCE SHEET

	At December 31, 2011
	Mining		Coal railway transportation		Methanol, electricity and heat supply		Consolidated
	RMB’000		RMB’000		RMB’000		RMB’000
ASSETS
Segment assets		80,411,147		604,824		4,474,098		85,490,069
Interests in associates		170,226		—		1,513,671		1,683,897
Interests in jointly controlled entities		19,453		—		—		19,453
Unallocated corporate assets								9,958,172
								97,151,591
LIABILITIES
Segment liabilities		23,026,520		72,476		2,857,624		25,956,620
Unallocated corporate liabilities								27,869,921
								53,826,541

OTHER INFORMATION

	For the year ended December 31, 2011
	Mining			Coal railway transportation		Methanol, electricity and heat supply		Unallocated		Corporate		Consolidated
	RMB’000			RMB’000		RMB’000		RMB’000		RMB’000		RMB’000
Capital additions (note 1)		22,736,499			40,890		555,250		—		3,790		23,336,429
Investments in associates		540,000			—		—		—		—		540,000
Amortization of intangible assets		717,709			252		2,047		—		—		720,008
Release of prepaid lease payments		10,432			5,372		3,214		—		—		19,018
Impairment loss on property, plant and equipment		—			—		281,994		—		—		281,994
Depreciation of property, plant and equipment		1,711,257			73,885		477,872		—		3,003		2,266,017
Impairment losses (reversed) charged on accounts receivable and other receivables		(789	)		—		688		—		—		(101	)

Note 1: Capital additions include those arising from the acquisition of additional interests in joint venture and subsidiaries during the year.

F-40

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

6. SEGMENT INFORMATION—Continued

INCOME STATEMENT

	For the year ended December 31, 2010
	Mining		Coal railway transportation		Methanol, electricity and heat supply		Eliminations			Consolidated
	RMB’000		RMB’000		RMB’000		RMB’000			RMB’000
GROSS REVENUE
External		32,590,911		513,282		840,059		—			33,944,252
Inter-segment		339,355		36,051		455,259		(830,665	)		—
Total		32,930,266		549,333		1,295,318		(830,665	)		33,944,252

Inter-segment revenue is charged at prices pre-determined by the relevant governmental authority.

	For the year ended December 31, 2010
	Mining		Coal railway transportation		Methanol, electricity and heat supply			Eliminations		Consolidated
	RMB’000		RMB’000		RMB’000			RMB’000		RMB’000
RESULT
Segment results		11,096,252		51,554		(459,610	)		—		10,688,196
Unallocated corporate expenses											(473,502	)
Unallocated corporate income											2,669,925
Interest income											187,189
Share of profit of associates		2,102		—		6,768			—		8,870
Interest expenses											(603,343	)
Profit before income taxes											12,477,335
Income taxes											(3,171,043	)
Profit for the year											9,306,292

F-41

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

6. SEGMENT INFORMATION—Continued

BALANCE SHEET

	At December 31, 2010
	Mining		Coal railway transportation		Methanol, electricity and heat supply		Consolidated
	RMB’000		RMB’000		RMB’000		RMB’000
ASSETS
Segment assets		57,600,041		637,184		5,083,532		63,320,757
Interest in an associate		127,102		—		947,856		1,074,958
Interests in jointly controlled entities		751		—		—		751
Unallocated corporate assets								8,359,398
								72,755,864
LIABILITIES
Segment liabilities		5,170,012		38,782		2,653,337		7,862,131
Unallocated corporate liabilities								27,455,282
								35,317,413

OTHER INFORMATION

	For the year ended December 31, 2010
	Mining			Coal railway transportation		Methanol, electricity and heat supply		Unallocated		Corporate		Consolidated
	RMB’000			RMB’000		RMB’000		RMB’000		RMB’000		RMB’000
Capital additions (note 1)		3,297,996			34,498		452,838		—		2		3,785,334
Investments in associates		125,000			—		—		—		—		125,000
Amortization of intangible assets		341,003			5,014		3,638		—		—		349,655
Release of prepaid lease payments		9,760			5,372		2,826		—		—		17,958
Provision for inventories		—			—		4,411		—		—		4,411
Impairment loss on property, plant and equipment		—			—		97,559		—		—		97,559
Depreciation of property, plant and equipment		1,903,758			77,399		442,427		—		3,042		2,426,626
Written off of property, plant and equipment		—			—		1,491		—		—		1,491
Impairment losses (reversed) charged on accounts receivable and other receivables		(6,828	)		—		1,905		—		—		(4,923	)
Gain on disposal of a joint venture and subsidiaries		117,928			—		—		—		—		117,928

Note 1: Capital additions include those arising from the acquisition of three subsidiaries during the year.

F-42

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

6. SEGMENT INFORMATION—Continued

GEOGRAPHICAL INFORMATION

The following table sets out the geographical information. The geographical location of sales to external customers is based on the location at which the services were provided or the goods delivered. The geographical location of the specified non-current assets is based on the physical location of the asset, in the case of property, plant and equipment, the location of the operation to which they are allocated, in the case of intangible assets and goodwill, and the location of operations, in the case of interests in associates and jointly controlled entities.

The geographical information of revenue are as follows:

	Revenue from external customers
	For the year ended December 31,
	2012		2011		2010
	RMB’000		RMB’000		RMB’000
The PRC (place of domicile)		48,518,837		38,301,175		28,633,685
Australia		2,297,615		255,206		115,227
Others		7,329,732		8,509,459		5,195,340
Total		58,146,184		47,065,840		33,944,252

The geographical information of specified non-current assets are as follows:

	Specified non-current assets
	At December 31,
	2012		2011		2010
	RMB’000		RMB’000		RMB’000
The PRC (place of domicile)		36,991,705		31,130,104		17,412,174
Australia		41,293,671		28,986,924		25,095,982
Canada		1,832,719		1,645,227		—
Total non-current assets		80,118,095		61,762,255		42,508,156

For the year ended December 31, 2012, the revenue from mining segment amounted to RMB56,200,600,000 (2011: RMB45,181,229,000; 2010: RMB32,590,911,000) which including sales to the Group’s largest customer located in the PRC of approximately RMB3,651,630,000 (2011: RMB3,854,540,000; 2010: RMB4,443,729,000). As at December 31, 2012, accounts receivable from this customer accounted for approximately 0% (2011: 0%; 2010: 0%) of the Group’s total accounts receivable.

7. NET SALES OF COAL

	Year ended December 31,
	2012			2011			2010
	RMB’000			RMB’000			RMB’000
Coal sold in the PRC, gross		46,573,253			36,416,565			27,280,344
Less: Transportation costs		(281,816	)		(311,708	)		(316,452	)
Coal sold in the PRC, net		46,291,437			36,104,857			26,963,892
Coal sold outside the PRC, gross		9,627,347			8,764,664			5,310,567
Less: Transportation costs		(1,822,409	)		(936,560	)		(844,018	)
Coal sold outside the PRC, net		7,804,938			7,828,104			4,466,549
Net sales of coal		54,096,375			43,932,961			31,430,441

F-43

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

7. NET SALES OF COAL—Continued

Net sales of coal represent the invoiced value of coal sold and are net of returns, discounts and transportation costs if the invoiced value includes transportation costs to the customers.

8. COST OF SALES AND SERVICE PROVIDED

	Year ended December 31,
	2012		2011		2010
	RMB’000		RMB’000		RMB’000
Materials		3,162,130		2,541,192		2,017,681
Wages and employee benefits		7,282,018		5,846,108		4,695,000
Electricity		699,648		520,890		223,639
Depreciation		2,057,092		1,398,711		1,462,706
Land subsidence, restoration, rehabilitation and environmental costs		1,781,267		1,720,740		1,545,302
Environmental management expenses		129,235		—		—
Annual fee and amortization of mining rights (note 24)		1,305,410		848,615		481,711
Transportation costs		80,093		73,560		76,171
Cost of traded coal		21,522,897		9,548,869		3,955,603
Business tax and surcharges		599,784		579,782		505,491
Others		3,341,966		2,646,827		1,838,019
		41,961,540		25,725,294		16,801,323

9. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

	Year ended December 31,
	2012		2011		2010
	RMB’000		RMB’000		RMB’000
Wages and employee benefits		1,749,759		1,703,713		1,347,221
Additional medical insurance		80,855		78,285		67,420
Staff training costs		7,630		53,682		65,097
Depreciation		343,133		230,542		298,895
Distribution charges		1,292,216		1,078,107		835,900
Resource compensation fees (note)		248,377		263,238		226,578
Repairs and maintenance		693,380		609,211		614,173
Research and development		62,406		119,234		70,606
Freight charges		34,800		29,246		24,540
Property, plant and equipment written off		—		—		1,491
Impairment loss on property, plant and equipment		226,925		281,994		97,559
Loss on disposal of property, plant and equipment		—		108,627		16,937
Provision for bad debt		10,627		1,195		1,905
Impairment loss on intangible assets		417,214		—		—
Impairment loss on goodwill		17,625		—		—
Impairment loss on inventories		140,883		—		4,411
Legal and professional fees		269,155		94,148		71,152
Social welfare and insurance		207,150		173,349		135,341
Utilities relating to administrative buildings		139,942		175,209		368,063
Environmental protection		46,022		83,690		110,254
Travelling, entertainment and promotion		169,062		188,087		98,709
Coal price adjustment fund		403,632		367,038		289,652
Bonus payments		11,050		6,409		—
Other sundry taxes		397,853		253,583		102,810
Others		1,017,940		671,616		244,728
		7,987,636		6,570,203		5,093,442

Note: In accordance with the relevant regulations, the Group pays resource compensation fees (effectively a government levy) to the Ministry of Geology and Mineral Resources at the rate of 1% on the sales value of raw coal.

F-44

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

10. OTHER INCOME

	Year ended December 31,
	2012		2011		2010
	RMB’000		RMB’000		RMB’000
Dividend income		3,702		2,433		4,504
Gain on sales of auxiliary materials		32,300		20,751		22,820
Government grants		72,867		29,431		43,273
Interest income		722,336		357,708		187,189
Exchange gain, net		714,166		518,553		2,665,421
Gain on disposal of a joint venture and subsidiaries		—		—		117,928
Bargain purchase (note 46)		1,269,269		—		—
Others		115,805		146,889		66,946
		2,930,445		1,075,765		3,108,081

The above dividend income is from listed investments.

11. INTEREST EXPENSES

	Year ended December 31,
	2012			2011		2010
	RMB’000			RMB’000		RMB’000
Interest expenses on:
- bank and other borrowings wholly repayable within 5 years		1,453,459			804,700		594,679
- bank and other borrowings not wholly repayable within 5 years		88,550			9,675		5,369
- bills receivable discounted without recourse		2,367			24,930		2,695
Deemed interest expenses in respect of acquisition of Jining III		—			—		600
		1,544,376			839,305		603,343
Less: interest expenses capitalized into construction in progress		(95,697	)		—		—
		1,448,679			839,305		603,343

12. INCOME TAXES

	Year ended December 31,
	2012			2011		2010
	RMB’000			RMB’000		RMB’000
Income taxes:
Current taxes		1,328,624			3,176,627		2,467,741
Under provision in prior years		142,957			20,174		10,085
		1,471,581			3,196,801		2,477,826
Deferred taxes (note 41)
Australian Minerals Resources Rent Tax		(1,550,277	)		—		—
Others		202,633			348,578		693,217
		123,937			3,545,379		3,171,043

The Company and its subsidiaries in the PRC are subject to a standard income tax rate of 25% on its taxable income (2011: 25%; 2010: 25%).

Taxation arising in other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

F-45

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

12. INCOME TAXES—Continued

The Australian Minerals Resources Rent Tax (“MRRT”) legislation was enacted on March 19, 2012 and effective from July 1, 2012. According to the relevant provisions of the MRRT laws, subsidiaries in Australia are required to determine the starting base allowance on the balance sheet. Book value or market value approach can be selected in calculating the starting base and subsequently amortize within the prescribed useful life.

Market value approach was selected for mines in Australia. Under the market value approach, base value is determined based on market value of the coal mines on May 1, 2010 and amortize base on the shorter of the life of mining project, mining rights and mining production. During the year, additional deferred tax has been recognised.

The total charge for the year can be reconciled to the profit per the consolidated income statement as follows:

	Year ended December 31,
	2012			2011			2010
	RMB’000			RMB’000			RMB’000
Standard income tax rate in the PRC		25	%		25	%		25	%
Standard income tax rate applied to income before income taxes		1,586,546			3,130,247			3,119,333
Reconciling items:
Tax effect of future development fund deductible for tax purposes		—			—			(18,601	)
Deemed interest not deductible for tax purposes		—			—			150
Effect of (income) expense exempt from taxation		(668,039	)		33,520			(242,252	)
Deemed interest income from subsidiaries subject to tax		142,361			63,058			18,571
Tax effect of tax losses not recognized		202,744			217,791			150,590
Under provision in prior years		142,957			20,174			10,085
MRRT benefit		(1,085,194	)		—			—
Utilization of unrecognized tax losses in prior years		(20,700	)		(83,336	)		—
Effect of tax rate differences in other taxation jurisdictions		36,564			164,297			135,942
Others		(213,302	)		(372	)		(2,775	)
Income taxes		123,937			3,545,379			3,171,043
Effective income tax rate		2	%		28	%		25	%

F-46

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

13. PROFIT BEFORE INCOME TAX

	Year ended December 31,
	2012			2011			2010
	RMB’000			RMB’000			RMB’000
Profit before income tax has been arrived at after charging:
Amortization of intangible assets		1,177,595			720,008			349,655
Depreciation of property, plant and equipment
- under finance leases		8,180			—			—
- self-owned		2,811,224			2,266,017			2,426,626
Total depreciation and amortization		3,996,999			2,986,025			2,776,281
Release of prepaid lease payments		18,363			19,018			17,958
Impairment loss recognised in respect of:
- Property, plant and equipment		226,925			281,994			97,559
- Intangible assets		417,214			—			—
- Goodwill		17,625			—			—
- Inventories		140,883			—			4,411
Auditors’ remuneration		19,916			18,112			16,763
Staff costs, including directors’ and supervisors’ emoluments		10,022,134			8,222,047			5,988,821
Retirement benefit scheme contributions (included in staff costs above)		3,657,504			1,699,443			785,051
Cost of inventories		25,425,263			12,723,350			16,167,748
Research and development costs		62,406			119,234			70,606
Operating lease charges in respect of leased premises		72,400			31,960			18,287
and crediting:
(Gain) Loss on disposal of property, plant and equipment		(9,862	)		108,627			16,937
Exchange gains, net		(714,166	)		(518,553	)		(2,665,421	)
Provision (reversal) of impairment loss on accounts receivable and other receivables		6,452			(101	)		(4,923	)

F-47

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

14. DIRECTORS’ AND SUPERVISORS’ REMUNERATION AND FIVE HIGHEST PAID INDIVIDUALS

(a) Directors’ and supervisors’ emoluments

Details of the directors’ and supervisors’ emoluments are as follows:

	For the year ended December 31, 2012
	Fees		Salaries, allowance and other benefits in kind		Retirement benefit  scheme contributions		Total
	RMB’000		RMB’000		RMB’000		RMB’000
Independent non-executive directors
Wang Xiaojun		130		—		—		130
Wang Xianzheng		130		—		—		130
Cheng Faguang		130		—		—		130
Xue Youzhi		130		—		—		130
		520		—		—		520
Executive directors
Wang Xin		—		—		—		—
Zhang Yingmin		—		728		146		874
Li Weimin		—		—		—		—
Shi Xuerang		—		—		—		—
Wu Yuxiang		—		505		101		606
Zhang Baocai		—		517		103		620
Dong Yunqing		—		520		104		624
		—		2,270		454		2,724
Supervisors
Song Guo		—		—		—		—
Zhang Shengdong		—		—		—		—
Zhou Shoucheng		—		—		—		—
Zhen Ailan		—		—		—		—
Wei Huanmin		—		516		103		619
Xu Bentai		—		506		101		607
		—		1,022		204		1,226
Other management team
Liu Chun		—		564		113		677
He Ye		—		720		144		864
Tian Fengze		—		529		106		635
Shi Chengzhong		—		543		109		652
Ni Xinghua		—		553		111		664
Lai Cunliang		—		690		—		690
		—		3,599		583		4,182

F-48

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

14. DIRECTORS’ AND SUPERVISORS’ REMUNERATION AND FIVE HIGHEST PAID INDIVIDUALS—Continued

(a) Directors’ and supervisors’ emoluments—Continued

Details of the directors’ and supervisors’ emoluments are as follows:

	For the year ended December 31, 2011
	Fees		Salaries, allowance and other benefits in kind		Retirement benefit  scheme contributions		Total
	RMB’000		RMB’000		RMB’000		RMB’000
Independent non-executive directors
Pu Hongjiu		49		—		—		49
Di Xigui		49		—		—		49
Li Weian		49		—		—		49
Wang Junyan		49		—		—		49
Wang Xiaojun		72		—		—		72
Wang Xianzheng		72		—		—		72
Cheng Faguang		72		—		—		72
Xue Youzhi		72		—		—		72
		484		—		—		484
Executive directors
Wang Xin		—		—		—		—
Zhang Yingmin		—		169		34		203
Li Weimin		—		—		—		—
Shi Xuerang		—		—		—		—
Chen Changchun		—		—		—		—
Wu Yuxiang		—		381		76		457
Wang Xinkun		—		329		66		395
Zhang Baocai		—		390		78		468
Dong Yunqing		—		396		79		475
		—		1,665		333		1,998
Supervisors
Song Guo		—		—		—		—
Zhang Shengdong		—		—		—		—
Zhou Shoucheng		—		—		—		—
Zhen Ailan		—		—		—		—
Wei Huanmin		—		390		78		468
Xu Bentai		—		430		86		516
		—		820		164		984
Other management team
Jin Tai		—		169		34		203
Liu Chun		—		13		3		16
He Ye		—		169		34		203
Tian Fengze		—		428		86		514
Shi Chengzhong		—		462		92		554
Ni Xinghua		—		438		88		526
Lai Cunliang		—		700		—		700
		—		2,379		337		2,716

F-49

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

14. DIRECTORS’ AND SUPERVISORS’ REMUNERATION AND FIVE HIGHEST PAID INDIVIDUALS—Continued

(a) Directors’ and supervisors’ emoluments—Continued

Details of the directors’ and supervisors’ emoluments are as follows:

	For the year ended December 31, 2010
	Fees		Salaries, allowance and  other benefits in kind		Retirement benefit  scheme contributions		Total
	RMB’000		RMB’000		RMB’000		RMB’000
Independent non-executive directors
Pu Hongjiu		113		—		—		113
Zhai Xigui		113		—		—		113
Li Weian		113		—		—		113
Wang Junyan		113		—		—		113
		452		—		—		452
Executive directors
Wang Xin		—		—		—		—
Geng Jiahuai		—		—		—		—
Li Weimin		—		188		38		226
Shi Xuerang		—		—		—		—
Chen Changchun		—		—		—		—
Wu Yuxiang		—		269		54		323
Wang Xinkun		—		343		69		412
Zhang Baocai		—		312		62		374
Dong Yunqing		—		309		62		371
		—		1,421		285		1,706
Supervisors
Song Guo		—		—		—		—
Zhang Shengdong		—		—		—		—
Zhou Shoucheng		—		—		—		—
Zhen Ailan		—		—		—		—
Wei Huanmin		—		305		61		366
Xu Bentai		—		346		69		415
		—		651		130		781
Other management team
Jin Tai		—		189		38		227
Zhang Yingmin		—		189		38		227
He Ye		—		188		38		226
Tian Fengze		—		291		58		349
Shi Chenzhong		—		342		68		410
Qu Tianzhi		—		285		57		342
Ni Xinghua		—		328		66		394
Lai Cunliang		—		664		—		664
		—		2,476		363		2,839

No directors waived any of their emoluments in each of the year ended December 31, 2012, 2011 and 2010.

F-50

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

14. DIRECTORS’ AND SUPERVISORS’ REMUNERATION AND FIVE HIGHEST PAID INDIVIDUALS—Continued

(b) Employees’ emoluments

The five highest paid individuals in the Group included no director for the year ended December 31, 2012 (2011: nil; 2010: nil). The emoluments of the five highest paid individuals (2011: five; 2010: five) were stated as follows:

	Year ended December 31,
	2012		2011		2010
	RMB’000		RMB’000		RMB’000
Salaries, allowance and other benefits in kind		18,877		19,282		4,411
Retirement benefit scheme contributions		538		74		228
Discretionary bonuses		5,827		1,725		28
		25,242		21,081		4,667

Their emoluments were within the following bands:

	Year ended December 31,
	2012		2011		2010
	No. of employees		No. of employees		No. of employees
Nil to HK$1,000,000		—		—		3
HK$1,000,001 to HK$1,500,000		—		—		1
HK$1,500,001 to HK$2,000,000		—		—		1
HK$3,500,001 to HK$4,000,000		2		1		—
HK$4,000,001 to HK$4,500,000		—		2		—
HK$4,500,001 to HK$5,000,000		1		—		—
HK$5,000,001 to HK$5,500,000		—		1		—
HK$5,500,001 to HK$6,000,000		1		—		—
HK$8,000,001 to HK$8,500,000		—		1		—
HK$12,000,001 to HK$12,500,000		1		—		—

15. DIVIDEND RECOGNIZED AS DISTRIBUTION DURING THE YEAR

	Year ended December 31,
	2012		2011		2010
	RMB’000		RMB’000		RMB’000
2011 final dividend, RMB 0.570 per share (2011: 2010 final dividend RMB0.590 per share; 2010: 2009 final dividend RMB0.250 per share)		2,803,488		2,901,856		1,229,600

F-51

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

15. DIVIDENDS RECOGNIZED AS DISTRIBUTION DURING THE YEAR—Continued

In the annual general meeting held on June 25, 2010, a final dividend of RMB0.250 per share in respect of the year ended December 31, 2009 was approved by the shareholders and paid to the shareholders of the Company.

In the annual general meeting held on May 20, 2011, a final dividend of RMB0.590 per share in respect of the year ended December 31, 2010 was approved by the shareholders and paid to the shareholders of the Company.

In the annual general meeting held on June 22, 2012, a final dividend in of RMB0.570 per share in respect of the year ended December 31, 2011 was approved by the shareholders and paid to the shareholders of the Company.

The board of directors proposes to declare a final dividend of approximately RMB1,770,624,000 calculated based on a total number of 4,918,400,000 shares issued at RMB1 each, at RMB0.360, in respect of the year ended December 31, 2012. The declaration and payment of the final dividend needs to be approved by the shareholders of the Company by way of an ordinary resolution in accordance with the requirements of the Company’s Articles of Association. A shareholders’ general meeting will be held for the purpose of considering and, if thought fit, approving this ordinary resolution.

16. EARNINGS PER SHARE AND PER ADS

The calculation of the earnings per share attributable to the equity holders of the Company for the years ended December 31, 2012, 2011 and 2010 is based on the profit attributable to the equity holders of the Company for the year of RMB6,218,969,000, RMB8,928,102,000 and RMB9,281,386,000 and on the 4,918,400,000 shares in issue, during each of the three years.

The earnings per ADS have been calculated based on the profit for the relevant periods and on one ADS, being equivalent to 10 H shares.

No diluted earnings per share has been presented as there are no dilutive potential shares in issue during the years ended December 31, 2012, 2011 and 2010.

17. BANK BALANCES AND CASH/TERM DEPOSITS AND RESTRICTED CASH

Bank balances carry interest at market rates which ranged from 0.35% to 3.35% (2011: from 0.50% to 4.25%) per annum.

At the balance sheet date, the restricted cash of the PRC subsidiaries represents deposits paid for safety work as required by the State Administrative of work safety, which carry interest at market rates of 0.01%-5.75% (2011: 0.5%-3.95%) the remaining portion represents deposits placed as guarantee for the future payment of land subsidence as required by the Australian government, which carry interest at average rate of 2.58% (2011:4.41%).

Term deposits was pledged to certain banks as security for loans and banking facilities granted to the Group, which carry fixed interest rate ranging from 2.60%-4.75% (2011: 3.10%-6.20%).

F-52

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

18. BILLS AND ACCOUNTS RECEIVABLE

	At December 31,
	2012			2011
	RMB’000			RMB’000
Accounts receivable		928,935			817,952
Less: Impairment loss		(2,532	)		(4,143	)
		926,403			813,809
Bills receivables		6,533,200			6,498,265
Total bills and accounts receivable, net		7,459,603			7,312,074

Bills receivable represents unconditional orders in writing issued by or negotiated from customers of the Group for completed sale orders which entitle the Group to collect a sum of money from banks or other parties. The bills are non-interest bearing and have a maturity of six months.

According to the credit rating of different customers, the Group allows a range of credit periods to its trade customers not exceeding 180 days.

The following is an aged analysis of bills and accounts receivable based on the invoice dates at the balance sheet dates:

	At December 31,
	2012		2011
	RMB’000		RMB’000
1 - 90 days		3,423,025		4,037,903
91 - 180 days		3,954,398		3,274,171
181 - 365 days		80,812		—
Over 1 year		1,368		—
		7,459,603		7,312,074

Before accepting any new customer, the Group assesses the potential customer’s credit quality and defines credit limits by customer. Limits attributed to customers are reviewed once a year.

There are no significant trade receivables which are past due but not yet impaired on both balance sheet dates. The Group does not hold any collateral over these balances. The average age of these receivables is 96 days (2011: 86 days). The management closely monitors the credit quality of accounts receivable and consider the balance that are neither past due nor impaired are of good credit quality.

The Group has provided fully for all receivables over 3 years because historical experience is such that receivables that are past due beyond 3 years are generally not recoverable. For receivable aged over 4 years and considered irrecoverable by the management will be written off.

F-53

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

18. BILLS AND ACCOUNTS RECEIVABLE—Continued

An analysis of the impairment loss on bills and accounts receivable for 2012 and 2011 are as follows:

	2012			2011
	RMB’000			RMB’000
Balance at January 1		4,143			5,406
Provided for the year		5			—
Reversal		(1,616	)		(1,263	)
Balance at December 31		2,532			4,143

Included in the allowance for doubtful debts is an allowance of RMB2.5 million (2011: RMB4.1 million) for individually impaired trade receivables, which are mainly due from corporate customers in the PRC and considered irrecoverable by the management after consideration on the credit quality of those individual customers, the ongoing relationship with the Group and the aging of these receivables. The impairment recognized represents the difference between the carrying amount of these trade receivables and the present value of the amounts. The Group does not hold any collateral over these balances.

19. ROYALTY RECEIVEABLE

	2012			2011
	RMB’000			RMB’000
As at January 1		—			—
Acquisition of Gloucester		1,290,015			—
Cash received		(27,924	)		—
Unwinding discount		72,353			—
Exchange re-alignment		38,596			—
Change in fair value		(23,593	)		—
As at December 31		1,349,447			—
Current portion		114,798			—
Non- current portion		1,234,649			—
		1,349,447			—

A right to receive a royalty of 4% of Free on Board trimmed sales from Middlemount mine operated by Middlemount Joint Venture was acquired as part of the acquisition of Gloucester. This financial assets has been determined to have a finite life being the life of the Middlemount and is measured at fair value basis.

The royalty receivable is measured based on management expectations of the future cash flows with the re-measurement recorded in the income statement at each balance sheet date. The amount expected to be received in the next 12 month will be disclosed as current receivable and the discounted expected future cash flow beyond 12 months will be disclosed as a non-current receivable. Unwinding discount is included in interest income (note 10).

F-54

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

20. INVENTORIES

	At December 31,
	2012		2011
	RMB’000		RMB’000
COST
Methanol		9,470		11,786
Auxiliary materials, spare parts and small tools		507,605		414,475
Coal products		1,048,456		964,986
		1,565,531		1,391,247

21. PREPAYMENTS AND OTHER RECEIVABLES

	At December 31,
	2012		2011
	RMB’000		RMB’000
Advances to suppliers		729,216		738,395
Deposit for environment protection		813,212		651,699
Prepaid relocation costs of inhabitants		1,877,911		1,714,506
Others		776,660		520,279
		4,196,999		3,624,879

Included in the above balances as of December 31, 2012 is an impairment loss of RMB 25,292,000 (2011: RMB17,229,000). During the years ended December 31, 2012 and 2011, there were no impairment loss written off.

The Group has provided fully for all receivables over 3 years because historical experience is such that receivables that are past due beyond 3 years are generally not recoverable. Receivable will be written off, if aged over 4 years and considered irrecoverable by the management after considering the credit quality of the individual party and the nature of the amount overdue.

22. PREPAID LEASE PAYMENTS

	At December 31,
	2012		2011
	RMB’000		RMB’000
Current portion		18,418		18,975
Non-current portion		695,675		713,425
		714,093		732,400

The amounts represent prepaid lease payments for land use rights which are situated in the PRC and have a term of 45 to 50 years from the date of grant of land use rights certificates.

F-55

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

23. PREPAYMENT FOR RESOURCES COMPENSATION FEES

In accordance with the relevant regulations, the Shanxi Group is required to pay resources compensation fees to the Heshun Municipal Coal Industry Bureau at a rate of RMB2.70 per tonne of raw coal mined. During the year 2006, Shanxi Group was requested by the relevant government to prepay the fees based on production volume of 10 million tonnes. At the balance sheet date, the amount represented the prepayment for resources compensation fees not yet utilized.

During the year, the government authority completed the assessment of Shanxi mining right. The Shanxi Group in aggregate have to pay compensation fees of RMB218,493,000, thereafter and no longer required to pay the resources compensation fees to relevant government authority.

24. INTANGIBLE ASSETS

	Mining reserves			Mining resources			Potash mineral exploration permit			Technology			Rail access rights			Water Licenses			Others			Total
	RMB’000			RMB’000			RMB’000			RMB’000			RMB’000			RMB’000			RMB’000			RMB’000
COST
At January 1, 2011		15,834,711			3,905,285			—			167,848			3,565			132,620			19,944			20,063,973
Exchange re-alignment		(705,304	)		(189,370	)		—			(7,615	)		(80	)		(366	)		(636	)		(903,371	)
Acquisition of additional interests in joint venture		887,022			97,111			—			—			—			—			77			984,210
Acquisition of Syntech		228,334			164,040			—			—			—			—			—			392,374
Acquisition of Premier Coal and Wesfarmers Char		276,890			234,296			—			—			—			—			—			511,186
Acquisition of An Yuan Coal Mine		1,258,433			—			—			—			—			—			—			1,258,433
Acquisition of Xintai		3,333,970			—			—			—			—			—			—			3,333,970
Acquisition of potash mineral exploration permits		—			—			1,645,227			—			—			—			—			1,645,227
Additions for the year		1,825			47,201			—			—			—			—			3,622			52,648
Disposals for the year		—			—			—			—			(3,485	)		—			(177	)		(3,662	)
Transfer		17,335			(17,335	)		—			—			—			—			—			—
At December 31, 2011 and at January 1, 2012		21,133,216			4,241,228			1,645,227			160,233			—			132,254			22,830			27,334,988
Exchange re-alignment		75,849			29,593			55,797			3,175			—			153			22,600			187,167
Acquisition of Beisu and Yangcun		464,600			—			—			—			—			—			—			464,600
Acquisition of Gloucester		3,028,962			2,589,405			—			—			—			—			933			5,619,300
Additions for the year		1,871,472			792,402			—			—			—			—			103,646			2,767,520
Reclassification		—			35,798			(35,798	)		—			—			—			—			—
Transfer		2,388,671			(2,388,671	)		—			—			—			—			—			—
At December 31, 2012		28,962,770			5,299,755			1,665,226			163,408			—			132,407			150,009			36,373,575
AMORTIZATION
At January 1, 2011		426,884			—			—			—			252			—			3,673			430,809
Exchange re-alignment		(20,393	)		—			—			—			(6	)		—			(304	)		(20,703	)
Provided for the year		708,848			—			—			—			324			—			10,836			720,008
Eliminated on disposals		—			—			—			—			(570	)		—			(175	)		(745	)
At December 31, 2011 and at January 1, 2012		1,115,339			—			—			—			—			—			14,030			1,129,369
Exchange re-alignment		12,824			1,425			—			—			—			—			903			15,152
Provided for the year		1,161,176			—			—			—			—			—			16,419			1,177,595
Impairment loss		255,231			161,983			—			—			—			—			—			417,214
At December 31, 2012		2,544,570			163,408			—			—			—			—			31,352			2,739,330
CARRYING VALUE
At December 31, 2012		26,418,200			5,136,347			1,665,226			163,408			—			132,407			118,657			33,634,245
At December 31, 2011		20,017,877			4,241,228			1,645,227			160,233			—			132,254			8,800			26,205,619

F-56

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

24. INTANGIBLE ASSETS—Continued

The Parent Company and the Company have entered into a mining rights agreement pursuant to which the Company has agreed to pay to the Parent Company, effective from September 25, 1997, an annual fee of RMB12,980,000 as compensation for the Parent Company’s agreement to give up the mining rights associated with the Xinglongzhuang coal mine, Baodian coal mine, Nantun coal mine, Dongtan coal mine and Jining II. The annual fee is subject to change after a ten-year period. Compensation fee of RMB5 per tonne of raw coal mined amounting to RMB145,235,000 (2011: RMB139,767,000) for the year has been preliminary agreed and the revised compensation fees are to be settled with the government authority directly. During the year, the government authority finalized its assessment on the mining compensation fee and the Company is required to pay RMB2,476,780,000 for acquiring the aforesaid mining right, net off of the compensation fees paid and hence, RMB1,778,832,000 is recognised in mining reserves.

The mining rights (mining reserves) are amortized based on unit of production method.

Rail access rights are amortized on a straight line basis or unit of production basis over the life of the mine.

The potash mineral exploration permit is reclassified to mineral resources according to its progress of exploration. Technology has not yet reached the stage of commercial application and therefore is not amortized.

Water licenses are amortized over the life of mine. The mining activities of the relevant locations have not yet been started and the connections to water sources have not been completed. Therefore, no amortization was provided.

Other intangible assets mainly represent computer software which is amortized on a straight line basis of 2.5 to 5 years over the useful life.

Amortization expense of the mining rights for the year of RMB1,161,176,000 (2011: RMB708,848,000) has been included in cost of sales and service provided. Amortization expense of other intangible assets for the year of RMB16,419,000 (2011: RMB11,160,000) has been included in selling, general and administrative expenses.

At December 31, 2012, intangible assets with a carrying amount of approximately RMB1,960,908,000 (2011: RMB2,095,988,000) have been pledged to secure the Group’s borrowings (note 37).

F-57

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

25. PROPERTY, PLANT AND EQUIPMENT

	Freehold land in Australia			Buildings			Harbor works and crafts		Railway structures			Mining structures			Plant, machinery and equipment			Transportation equipment			Construction in progress			Total
	RMB’000			RMB’000			RMB’000		RMB’000			RMB’000			RMB’000			RMB’000			RMB’000			RMB’000
COST
At January 1, 2011		292,808			3,941,298			253,678		1,414,596			5,712,927			20,091,382			388,931			930,600			33,026,220
Exchange re-alignment		(15,704	)		(13,900	)		—		—			(63,626	)		(273,697	)		—			(34,671	)		(401,598	)
Acquisition of additional interests in joint venture		—			6,188			—		—			86,838			262,050			—			57,044			412,120
Acquisition of Syntech		27,723			—			—		—			189,139			638,413			—			70,256			925,531
Acquisition of Premier Coal and Wesfarmers Char		51,459			211,047			—		—			260,069			1,121,542			—			104,497			1,748,614
Acquisition of An Yuan Coal Mine		—			47,524			—		—			112,016			16,429			98			—			176,067
Acquisition of Xintai		—			—			—		—			—			167,976			—			—			167,976
Additions		23,155			9,884			—		—			23,389			94,501			4,842			10,873,321			11,029,092
Transfers		3,330			94,505			—		158,156			263,351			1,595,832			58,712			(2,173,886	)		—
Disposals		(1,413	)		(7,983	)		—		(23,789	)		(204,616	)		(1,283,471	)		(26,522	)		—			(1,547,794	)
At December 31, 2011 and January 1, 2012		381,358			4,288,563			253,678		1,548,963			6,379,487			22,430,957			426,061			9,827,161			45,536,228
Exchange re-alignment		28,421			9,727			—		—			68,921			195,142			—			60,527			362,738
Acquisition of Beisu and Yangcun		—			87,902			—		39,841			1,875			147,387			3,116			5,394			285,515
Acquisition of Gloucester		681,230			11,749			—		—			1,100,283			1,580,100			—			351,124			3,724,486
Additions		54,053			66,109			—		34,515			373,801			649,199			318			5,981,503			7,159,498
Transfers		10,496			215,186			—		106,086			101,012			1,543,579			40,708			(2,017,067	)		—
Reclassification		—			—			—		—			(136,413	)		136,413			—			—			—
Disposals		—			(25,473	)		—		(35,563	)		(31,228	)		(1,051,496	)		(13,766	)		—			(1,157,526	)
At December 31, 2012		1,155,558			4,653,763			253,678		1,693,842			7,857,738			25,631,281			456,437			14,208,642			55,910,939
ACCUMULATED DEPRECIATION AND IMPAIRMENT
At January 1, 2011		—			1,651,777			83,286		583,354			2,155,130			8,403,696			274,362			—			13,151,605
Exchange re-alignment		—			(925	)		—		—			(8,856	)		(46,220	)		—			—			(56,001	)
Provided for the year		—			109,558			5,702		300,136			179,661			1,634,746			36,214			—			2,266,017
Impairment loss		—			49,826			—		20,271			—			211,682			215			—			281,994
Eliminated on disposals		—			(5,140	)		—		(23,199	)		(54,358	)		(1,273,354	)		(25,160	)		—			(1,381,211	)
At December 31, 2011 and January 1, 2012		—			1,805,096			88,988		880,562			2,271,577			8,930,550			285,631			—			14,262,404
Exchange re-alignment		—			721			—		—			8,026			30,868			—			—			39,615
Provided for the year		—			146,857			—		163,323			335,878			2,134,734			38,612			—			2,819,404
Impairment loss		—			—			—		—			226,925			—			—			—			226,925
Eliminated on disposals		—			(4,762	)				(6,565	)		(5,564	)		(916,065	)		(7,556	)		—			(940,512	)
At December 31, 2012		—			1,947,912			88,988		1,037,320			2,836,842			10,180,087			316,687			—			16,407,836
CARRYING VALUE
At December 31, 2012		1,155,558			2,705,851			164,690		656,522			5,020,896			15,451,194			139,750			14,208,642			39,503,103
At December 31, 2011		381,358			2,483,467			164,690		668,401			4,107,910			13,500,407			140,430			9,827,161			31,273,824

F-58

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

25. PROPERTY, PLANT AND EQUIPMENT—Continued

The following estimated useful lives are used for the depreciation of property, plant and equipment, other than construction in progress and freehold land:

Buildings	10 to 30 years
Harbor works and crafts	40 years
Railway structures	15 to 25 years
Plant, machinery and equipment	2.5 to 25 years
Transportation equipment	6 to 18 years

Transportation equipment includes vessels which are depreciated over the estimated useful lives of 18 years.

The mining structures include the main and auxiliary mine shafts and underground tunnels. Depreciation is provided to write off the cost of the mining structures using the units of production method based on the estimated production volume for which the structure was designed and the contractual period of the relevant mining rights.

During the year ended December 31, 2012, the directors conducted a review of the Group’s mining assets and determined that no assets were impaired due to physical damage and technical obsolescence (2011: nil).

At December 31, 2012, property, plant and equipment with carrying amount of approximately RMB5,546,226,000 (2011: RMB3,325,937,000 ) have been pledged to secure bank borrowings of the Group (note 37).

At December 31, 2012, the carrying amount of property, plant and equipment held under finance leases of the group was RMB225,871,000 (2011: nil).

The Group assessed the recoverable amount of property, plant and equipment and recognized impairment loss of RMB226,925,000 (2011: RMB281,994,000) (included in selling, general and administrative expenses) for the year ended December 31, 2012.

26. OVERBURDEN IN ADVANCE

	At December 31,
	2012		2011
	RMB’000		RMB’000
Overburden in advance – cost		448,889		261,441

Overburden in advance comprises the accumulation of expenses incurred to enable access to the coal seams, and includes direct removal costs, machinery and plant running costs. The deferred costs are presented after the deduction of the portion that has been transferred to the income statement in the period.

F-59

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

27. GOODWILL

	2012			2011
	RMB’000			RMB’000
COST
At January 1		1,866,037			1,196,586
Acquisition of Syntech		—			25,642
Acquisition of Premier Coal and Wesfarmers Char		—			17,849
Acquisition of Xintai		—			653,837
Acquisition of Beisu and Yangcun		712,214			—
Exchange re-alignment		13,185			(27,877	)
Impairment loss		(17,625	)		—
At December 31		2,573,811			1,866,037

Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units that are expected to benefit from that business combination. The carrying amount of goodwill had been allocated as follows:

	At December 31,
	2012			2011
	RMB’000			RMB’000
Mining
- Jining II		10,106			10,106
- Shandong Yanmei Shipping Co., Ltd		10,046			10,046
- Heze		35,645			35,645
- Shanxi Group		145,613			145,613
- Yancoal Resources		640,650			628,202
- Syntech		28,581			28,035
- Premier Coal and Wesfarmers Char		17,625			17,434
- Xintai		653,837			653,837
- Beisu and Yangcun		712,214			—
Coal Railway Transportation
- Railway Assets		97,240			97,240
Electricity and heat supply
- Hua Ju Energy		239,879			239,879
Impairment loss		(17,625	)		—
		2,573,811			1,866,037

The recoverable amounts of goodwill from each of the above cash generating units have been determined on the basis of value in use calculations. The recoverable amounts are based on certain similar key assumptions on discount rates, growth rates and expected changes in selling prices, foreign currency exchange rates, mining reserves and mining resources and direct cost. All value in use calculations use cash flow projections based on financial budgets approved by management covering a 5-year period, with an assumption of discount rate of 8-11% (2011: 8-10%).

F-60

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

27. GOODWILL—Continued

The cash flows beyond the 5-year period are extrapolated for 5 years using a zero percent growth rate. Cash flow projections during the budget period for each of the above units are based on the budgeted revenue and expected gross margins during the budget period and the same raw materials price inflation during the budget period. Expected cash inflows/outflows, which include budgeted sales, gross margin and raw material price inflation, have been determined based on past performance and management’s expectations for the market development. Management believes that any reasonably possible change in any of these assumptions would not cause the carrying amount of each of the above units to exceed the recoverable amount of each of the above units. During the year ended 31 December 2012, the Group’s management determines that the recoverable cash flows of certain cash-generating unit is less than its commercial value, the Group recognised impairment loss on goodwill of RMB17,625,000 (2011: nil) in respect of goodwill arising from the acquisition of Premier Coal and Wesfarmers Char. No indication for impairment on other goodwill.

28. INVESTMENTS IN SECURITIES

The investments in securities represent available-for-sale equity investments:

	At December 31,
	2012		2011
	RMB’000		RMB’000
Equity securities listed on the Shanghai Stock Exchange (“SSE”)
- Stated at fair value		167,572		173,495
Unlisted equity securities		39,504		199,305
		207,076		372,800

The investments in equity securities listed on the SSE of the Company included Shanghai Shenergy Company Limited and Jiangsu Lian Yun Gang Port Corporation Limited, stated at the fair value as at December 31, 2012 of RMB161,328,000 (2011: RMB167,533,000) and RMB6,244,000 (2011: RMB5,962,000) respectively.

The investments in equity securities listed on the SSE are carried at fair value determined according to the quoted market prices in active market.

The unlisted equity securities are stated at cost less impairment at each balance sheet date because the range of reasonable fair value estimates is so significant that the directors of the Company are of the opinion that their fair value cannot be measured reliably.

F-61

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

29. INTERESTS IN ASSOCIATES

	At December 31,
	2012			2011
	RMB’000			RMB’000
Cost of investments in associates		2,378,927			1,565,000
Share of post-acquisition profit and other comprehensive income		260,973			118,897
Dividend received		(15,624	)		—
		2,624,276			1,683,897

Information of major associates is as follows:

	Place of establishment and operation	Class of shares held		Principal activity		At December 31,
						2012	2011
Name of associate						Interest held	Interest held
Huadian Zouxian Power Generation Company Limited	PRC		Registered Capital		Electricity generation business	30%	30%
Yankuang Group Finance Company Limited	PRC		Registered Capital		Financial services	25%	25%
Shaanxi Future Energy Chemical Corp. Ltd	PRC		Registered Capital		Production and sales of chemical products, oil and coal	25%	25%
Shengyang Wood	PRC		Registered Capital		Artificial board, CCF processing	39.77%	—
Jiemei Wall Material	PRC		Registered Capital		Coal refuse baked brick	20%	—
Newcastle Coal Infrastructure Group Pty Ltd	Australia		Registered Capital		Coal terminal	27%	—

Except Newcastle Coal Infrastructure Group Pty Ltd, all associates are held by the Company directly.

Summarized financial information in respect of the Group’s associates is set out below:

	2012			2011
	RMB’000			RMB’000
Total assets		24,751,952			15,707,916
Total liabilities		(15,289,724	)		(9,621,441	)
Net assets		9,462,228			6,086,475
Group’s share of net assets of associates		2,624,276			1,683,897

F-62

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

29. INTERESTS IN ASSOCIATES—Continued

	For the year ended December 31,
	2012		2011
	RMB’000		RMB’000
Revenue		5,030,530		4,343,215
Profit for the year		496,690		258,546
Group’s share of profit of associates		141,986		68,939
Group’s share of other comprehensive income of associates		90		—

30. LONG TERM RECEIVABLES

	At December 31,
	2012		2011
	RMB’000		RMB’000
Loan to a jointly controlled entity (i)		1,682,983		—
Others (ii)		318,475		300,083
		2,001,458		300,083

(i) Loan to a jointly controlled entity represented a loan to Middlemount Joint Venture of AUD257,483,000. The loan is unsecured and due on December 24, 2015 with normal commercial interest rate.

(ii) Other long term receivables represented an investment in preference shares of a company (AUD15,300,000) with cumulative dividends and investment in the long term bonds of a company (AUD31,500,000) with floating interest rate.

31. DEPOSITS MADE ON INVESTMENTS

	At December 31,
	2012		2011
	RMB’000		RMB’000
Shaanxi coal mine operating company		117,926		117,926
Inner Mongolia Haosheng Coal Mining Limited		2,982,455		2,439,881
Shandong Yanmei Rizhao Port Coal Storage and Blending Co., Ltd.		153,000		—
		3,253,381		2,557,807

During 2006, the Company entered into a co-operative agreement with two independent third parties to establish a company for acquiring a coal mine in Shaanxi province for operations. The Company will have to invest approximately RMB196,800,000 in order to obtain 41% equity interest. As at December 31, 2012, the Company made a deposit of RMB117,926,000 (2011: RMB117,926,000) in relation to this acquisition. As at December 31, 2012, the relevant procedures to establish the new company are still in progress, and the establishment has not yet been completed.

During 2010, the Company entered into a co-operative agreement with three independent third parties to acquire 51% equity interest of Inner Mongolia Hao Sheng Coal Mining Limited (“Hao Sheng”) at a consideration of RMB6,649 million and to obtain the mining rights of the Shilawusu Coal Field (“the mining right”) in name of Hao Sheng.

F-63

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

31. DEPOSITS MADE ON INVESTMENTS—Continued

During 2011, the Company entered into another co-operative agreement with two independent third parties to acquire additional 10% shareholding of Hao Sheng at a consideration of RMB1,314,000,000. In addition, the Company agreed to contribute RMB51 million in respect of increased registered capital of Hao Sheng.

On March 6, 2012, in response to the withdrawal of the allocated resources to one of the contract parties, Ordos Jin Cheng Tai Chemical Co., Ltd. (“Jin Cheng Tai”), by the Inner Mongolia government authority, the Company, together with four contract parties unanimously agreed to reduce the registered capital of Hao Sheng to RMB104,385,000 and adjust the equity interest of each contract party according to its share on the allocated resources. In addition, the Company entered into an additional agreement with Jin Cheng Tai to acquire additional 9.45% interest and adjusted the consideration paid to Jin Cheng Tai. During the year, the Company agreed with four contract parties to increase the registered capital of Hao Sheng by RMB 395,615,000.

Upon completion of the above agreements, the Company will hold 74.82% equity interest in Hao Sheng and the respective mining resources. Pursuant to the agreement, if the exploration license cannot be obtained within two years, this acquisition will be canceled and any consideration paid will be fully refunded to the Company. A supplemental agreement was entered with four contract parties during the year to extend the aforesaid terms for another two years. At December 31, 2012, the Company paid RMB 2,982,455,000 (2011: RMB 2,439,881,000) for this investment. Since this acquisition is to obtain the mining rights in name of Hao Sheng, therefore, the transaction has not been completed.

During the year, the Company entered into a cooperation agreement with two independent third parties to set up a company, Shandong Yanmei Rizhao Port Coal Storage and Blending Co., Ltd., as a coal blending, storage and distribution base in Rizhao Port. The Company contributed RMB153,000,000, representing 51% of its equity interest. At December 31, 2012, the registration procedures of such company have not yet completed.

F-64

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

32. INTERESTS IN JOINTLY CONTROLLED ENTITIES

	At December 31,
	2012		2011
	RMB’000		RMB’000
Share of net assets		1,086,985		19,453

Information on major jointly controlled entities is as follows:

	Place of establishment and operation		Class of shares held		Principal activity		At December 31,
							2012						2011
Name of jointly controlled entity							Voting power			Interest held			Voting power			Interest Held
Australian Coal Processing Holdings Pty Ltd (i)		Australia		Ordinary shares		Investment holding		50	%		90	%		50	%		90	%
Ashton Coal Mines Limited (ii)		Australia		Ordinary shares		Real estate holder & sales company		50	%		90	%		50	%		90	%
Middlemount Joint Venture (iii)		Australia		Ordinary shares		Coal mining and sales		50	%		49.9997	%		—			—

(i) During 2011, the Company, through a subsidiary acquired 30% equity interest held indirectly by a shareholder of Australian Coal Processing Holding Pty Ltd. The Company’s control in the Australian Coal Processing Holding Pty Ltd increased from 60% to 90%. Under the shareholders agreement between the subsidiary and the remaining one shareholder, all major financial and operating policy decisions require a vote by directors who together represent shareholders holding 100% of the shares or a vote by shareholders who together hold 100% of the shares. Therefore decisions must be passed unanimously by directors or shareholders and the subsidiary’s voting power is increased from 33.33% to 50%.

(ii) During 2011, the Company, through a subsidiary company acquired 30% equity interest held indirectly by a shareholder of Ashton Coal Mines Limited. The Company’s control in the Ashton Coal Mines Limited increased from 60% to 90%. Under the shareholders agreement between the subsidiary and the remaining one shareholder, all major financial and operating policy decisions require a unanimous resolution of the shareholders. Therefore, decisions must be passed unanimously by shareholders and the subsidiary’s voting power is increased from 33.33% to 50%.

(iii) During the year, the Company, through the acquisition of Gloucester, acquired 49.9997% equity interest in Middlemount Joint Venture and decision must be passed unanimously by shareholders.

F-65

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

32. INTERESTS IN JOINTLY CONTROLLED ENTITIES—Continued

(iv) The above jointly controlled entities are indirectly held by the Company.

Summarized financial information in respect of the Group’s jointly controlled entities is set out below:

	At December 31,
	2012			2011
	RMB’000			RMB’000
Share of total assets		4,624,385			207,331
Share of total liabilities		(3,537,400	)		(187,878	)
Group’s Share of net assets		1,086,985			19,453

	For the year ended December 31,
	2012			2011
	RMB’000			RMB’000
Share of revenue		1,235,139			1,616,364
Group’s Share of net loss		(103,217	)		—

33. INTERESTS IN JOINT VENTURES

Information on major joint ventures (other than jointly controlled entities) is as follows:

	Place of establishment and operation		Principal activity	At December 31,
				2012			2011
Name of joint venture				Interest held			Interest held
Boonal joint venture		Australia	Provision of a coal haul road and train load out facilities		50	%		50	%
Athena joint venture		Australia	Coal exploration		51	%		51	%
Ashton joint venture		Australia	Development and operation of open-cut and underground coal mines		90	%		90	%
Moolarben joint venture		Australia	Development and operation of open-cut and underground coal mines		80	%		80	%

The above joint ventures are established and operated as unincorporated businesses and are held indirectly by the Company.

F-66

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

33. INTERESTS IN JOINT VENTURES—Continued

The Group’s interest in the assets and liabilities of the joint ventures are set out below:

	At December 31,
	2012			2011
	RMB’000			RMB’000
Current assets		1,019,077			859,702
Non-current assets		20,860,234			20,243,996
Current liabilities		(20,478,765	)		(284,493	)
Non-current liabilities		(113,300	)		(79,765	)
		1,287,246			20,739,440

The Group’s share of revenue, expenses and loss before income tax of the joint ventures are set out below:

	For the year ended December 31,
	2012			2011
	RMB’000			RMB’000
Revenue		6,085,954			1,007,606
Expenses		(9,282,244	)		(4,246,184	)
Loss before income tax		(3,196,290	)		(3,238,578	)

34. BILLS AND ACCOUNTS PAYABLE

	At December 31,
	2012		2011
	RMB’000		RMB’000
Accounts payable		2,906,612		2,003,643
Bills payable		3,905,148		237,201
		6,811,760		2,240,844

The following is an aged analysis of bills and accounts payable based on the invoice dates at the balance sheet date:

	At December 31,
	2012		2011
	RMB’000		RMB’000
1 - 90 days		6,384,206		1,790,743
91 - 180 days		224,505		257,392
181 - 365 days		68,640		60,865
Over 1 year		134,409		131,844
		6,811,760		2,240,844

The average credit period for accounts payable and bills payable is 90 days. The Group has financial risk management policies in place to ensure that all payables are within the credit timeframe.

F-67

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

35. OTHER PAYABLES AND ACCRUED EXPENSES

	At December 31,
	2012		2011
	RMB’000		RMB’000
Customers’ deposits		1,368,734		1,523,567
Accrued wages		1,084,200		1,047,144
Other taxes payable		204,082		431,728
Payables in respect of purchases of property, plant and equipment and construction materials		3,662,785		2,733,713
Accrued freight charges		9,434		3,871
Accrued repairs and maintenance		51,221		34,957
Staff welfare payable		187,631		94,121
Withholding tax payable		7,251		641
Deposits received from employees		24,736		12,847
Coal price adjustment fund		51,995		47,072
Accrued land subsidence, restoration, rehabilitation and environmental costs		1,446		533
Payable on compensation fee of mining rights		—		552,686
Interest payable		395,778		243,437
Others		1,964,504		618,498
		9,013,797		7,344,815

36. PROVISION FOR LAND SUBSIDENCE, RESTORATION, REHABILITATION AND ENVIRONMENTAL COSTS

	2012			2011
	RMB’000			RMB’000
Balance at January 1		3,181,643			2,453,231
Exchange re-alignment		24,248			(11,267	)
Acquisition of Syntech		—			14,259
Acquisition of Premier Coal and Wesfarmers Char		—			168,847
Acquisition of Beisu and Yangcun		20			—
Acquisition of Gloucester		100,145			—
Additional provision in the year		1,450,557			1,513,084
Utilization of provision		(986,347	)		(956,511	)
Balance at December 31		3,770,266			3,181,643
Presented as:
Current portion		3,291,857			2,856,229
Non-current portion		478,409			325,414
		3,770,266			3,181,643

Provision for land subsidence, restoration, rehabilitation and environmental costs has been determined by the directors based on their best estimates. However, in so far as the effect on the land and the environment from current mining activities becomes apparent in future periods, the estimate of the associated costs may be subject to change in the near term.

F-68

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

37. BORROWINGS

	At December 31,
	2012		2011
	RMB’000		RMB’000
Current liabilities
Bank borrowings
- Unsecured borrowings (i)		5,024,476		13,193,083
- Secured borrowings (ii)		657,876		6,395,413
Loans pledged by machineries (iii)		2,000,000		—
Finance lease liabilities (iv)		30,240		—
		7,712,592		19,588,496
Non-current liabilities
Bank borrowings
- Unsecured borrowings (i)		3,875,665		2,110,000
- Secured borrowings (ii)		17,967,840		12,759,324
Finance lease liabilities (iv)		202,450		—
Guaranteed notes (v)		11,237,835		—
		33,283,790		14,869,324
Total borrowings		40,996,382		34,457,820

(i) Unsecured borrowings are repayable as follows:

	At December 31,
	2012		2011
	RMB’000		RMB’000
Within one year		5,024,476		13,193,083
More than one year, but not exceeding two years		256,000		22,000
More than two years, but not more than five years		3,619,665		2,066,000
More than five years		—		22,000
Total		8,900,141		15,303,083

At December 31, 2012, short-term borrowings amounting to RMB3,110,432,000 (2011: RMB11,892,000,000). Three new short-term borrowings of RMB1,083,858,000 (EUR130,165,000) are dominated in foreign currency with interest rates at three-months LIBOR plus a margin of 2%, approximately 2.31% (2011: nil). The remaining short term borrowings carried interest at 5.40%-6.56% per annum (2011: 6.06%-6.56% per annum). Long-term borrowings amounting to RMB4,403,887,000 (2011:RMB2,000,000,000) with RMB616,222,000 payable within one year. Long-term borrowing of RMB2,404,000,000 carried interest at 6.90% per annum while the remaining carried interest at 5.80% per annum (2011: 6.90% per annum). The interest rate will be adjusted in accordance with the benchmark lending rate published by the People’s Bank of China (“PBOC”). Long-term borrowings are guaranteed by the Parent Company.

The loan of Shanxi Tianchi was a loan which acquired before the acquisition of Shanxi Tianchi with the amount of RMB110,000,000 (2011: RMB132,000,000) carried interest at 6.4% (2011: 7.05%) per annum and is subject to adjustment based on the interest rate stipulated by PBOC. This loan is repayable by 20 instalments over a period of 12 years, with the first instalment due in May 2008. The loan is guaranteed by the Parent Company.

F-69

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

37. BORROWINGS—Continued

(i) Unsecured borrowings are repayable as follows:—Continued

The short-term borrowings of Yancoal International amounting to RMB1,275,822,000 (USD203,000,000; 2011: RMB1,279,083,000), the borrowings carried interest at LIBOR plus a margin of 1.7%, approximately 2.01% (2011: LIBOR plus 2.6%, approximately 3.16%). The loan will be fully repayable at maturity.

(ii) Secured borrowings are repayable as follows:

	At December 31,
	2012		2011
	RMB’000		RMB’000
Within one year		657,876		6,395,413
More than one year, but not exceeding two years		685,521		6,395,413
More than two years, but not more than five years		1,105,228		6,363,911
More than five years		16,177,091		—
Total		18,625,716		19,154,737

At December 31, 2012, loans obtained by the Group for the purpose of settling the consideration in respect of acquisition of Yancoal Resources amounting to RMB18,503,917,000 (USD 2,939,655,000; 2011: RMB19,154,737,000). The borrowings together with loans pledged by machineries are guaranteed by the Company, counter-guaranteed by the Parent Company and secured by the Group’s term deposits (note 17), property, plant and equipment (note 25), intangible assets (note 24) and other assets in Yancoal Resources.

The borrowings of RMB12,148,554,000 (USD1,930,000,000) (2011: RMB17,894,557,000) carried interest at three-month LIBOR plus a margin of 0.75% (approximately 1.06%). The borrowings of RMB283,256,000 (USD45,000,000) (2011:RMB1,260,180,000) carried interest at three-months LIBOR plus a margin of 0.8% (approximately 1.11%). The borrowings of RMB6,072,107,000 (USD964,655,000) carried interest at three-month LIBOR plus 2.8% (approximately 3.11%). Other borrowings arose from the acquisition of Gloucester, amounting to RMB121,799,000 (USD19,350,000) carried interest at 5.68%.

(iii) Loans pledged by machineries are repayable as follows:

	At December 31,
	2012			2011
	RMB’000			RMB’000
Minimum payments
Within one year		2,048,167			—
Less: Future finance charges		(48,167	)		—
Present value of lease payments		2,000,000			—

F-70

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

37. BORROWINGS—Continued

(iii) Loans pledged by machineries are repayable as follows:—Continued

	At December 31,
	2012			2011
	RMB’000			RMB’000
Present value of minimum payments
Within one year		2,000,000			—
Less: Amounts due within one year and included in current liabilities		(2,000,000	)		—
Amounts due after one year and included in non-current liabilities		—			—

At December 31, 2012, a loan of RMB2,000,000,000 carried interest at 6.56% per annum is pledged by machineries of the Group. The interest rate will be adjusted in accordance with the benchmark lending rate published by the People’s Bank of China (“PBOC”).

(iv) Finance lease liabilities are repayable as follows:

	At December 31,
	2012			2011
	RMB’000			RMB’000
Minimum payments
Within one year		44,829			—
More than one year, but not exceeding two years		44,832			—
More than two years, but not exceeding five years		148,641			—
More than five years		27,090			—
		265,392			—
Less: Future finance charges		(32,702	)		—
Present value of lease payments		232,690			—

	At December 31,
	2012			2011
	RMB’000			RMB’000
Present value of minimum payments
Within one year		30,240			—
More than one year, but not exceeding two years		46,943			—
More than two years, but not exceeding five years		140,829			—
More than five years		14,678			—
		232,690			—
Less: Amounts due within one year and included in current liabilities		(30,240	)		—
Amounts due after one year and included in non-current liabilities		202,450			—

Finance lease liabilities of RMB232,690,000 (AUD35,599,000) was obtained from the acquisition of Gloucester during the year, which carried interest at 7.74% per annum.

F-71

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

37. BORROWINGS—Continued

(v) Guaranteed notes are detailed as follows :

	At December 31,
	2012		2011
	RMB’000		RMB’000
Guaranteed notes denominated in USD repayable within five years		2,828,176		—
Guaranteed notes denominated in RMB repayable within five years		990,600		—
Guaranteed notes denominated in USD repayable after five years		3,456,659		—
Guaranteed notes denominated in RMB repayable after five years		3,962,400		—
		11,237,835		—

The above USD guaranteed notes were issued by a subsidiary of the Company on May 16, 2012. Guaranteed notes with par value of USD450,000,000 and USD550,000,000 will mature in 2017 and 2022 and with interest rate of 4.461% and 5.730% per annum respectively. The notes are unconditionally secured by the Company and the respective security is non-cancellable. For the year ended December 31, 2012, there was no redemption on the notes.

During the year, with the approval from China Securities Regulatory Commission, the Company is allowed to issue RMB notes within PRC domicile, RMB notes with par value of RMB300,167,000 and RMB4,699,833,000 was issued to the public and institutional investors. An unconditional and irrecoverable corporate guarantee was provided by the Parent Company on the RMB notes. At December 31, 2012, RMB notes of RMB4,953,000,000 include notes of RMB3,962,400,000 with a maturity period of ten years and interest rate of 4.20% per annum and notes of RMB990,600,000 with a maturity period of five years and interest rate of 4.95% per annum. For the year ended December 31, 2012, there was no redemption on the notes.

38. DERIVATIVE FINANCIAL INSTRUMENTS

	At December 31,
	2012		2011
	RMB’000		RMB’000
Derivatives used for cash flow hedging:
Current assets
- Forward foreign exchange contracts		76,640		104,910
- Collar Option		14,091		—
		90,731		104,910
Current liabilities
- Forward foreign exchange contracts		13,656		42,471
- Interest rate swap contracts		114,421		179,618
		128,077		222,089

F-72

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

38. DERIVATIVE FINANCIAL INSTRUMENTS—Continued

During the year ended December 31, 2012, the Group’s subsidiaries in Australia entered into forward foreign exchange contracts to sell or purchase specified amounts of foreign currencies in the future at stipulated exchange rates. The objective of entering into the forward foreign exchange contracts is to reduce the foreign exchange rate related volatility of revenue stream and capital expenditure and thereby assist in risk management for the Group. The outstanding sell United States dollars contracts are hedging highly probable forecasted sales of coal. Cash flows and any impact to profit or loss arising from all the foreign exchange contracts are expected to occur within one year from the balance sheet date.

As at December 31, 2012, the outstanding notional amount to sell United States dollars (sell United States dollars and buy Australian dollars) was approximately RMB5,390 million (2011: RMB3,279 million) and RMB746 million (2011: RMB1,553 million), all maturing within one year (2011: one year) with forward rates ranging from 0.9755 to 1.0013 (2011: ranging from 0.9182 to 1.0642 respectively) and floor price and ceiling price of 0.934 and 1.055 (2011: 0.9230 and 1.080).

As at December 31, 2012, the outstanding notional amount to buy Euro (“EUR”) (sell Australian dollars and buy EUR) was approximately RMB51 million, maturing within one year with forward rate at 0.99926 (2011: nil).

As at December 31, 2012, the outstanding notional amount to buy British Pound (sell Australian dollars and buy British Pound) was approximately RMB3 million, maturing within one year with forward rate at 0.99948 (2011: nil).

As at December 31, 2012, the outstanding notional amount to buy EUR (sell United States dollars and buy EUR) was approximately RMB114 million maturing within one year with forward rates ranging from 1.00013 to 1.00031 (2011: nil).

The Company also entered into contracts with three banks to hedge a proportion of borrowings issued at variable interest rates through the use of floating-to-fixed interest rate swap contracts. As at December 31, 2012, the outstanding notional amount was approximately RMB 6,285 million (USD1,000 million) (2011: RMB9,451 million (USD 1,500 million)), contract period of four years (2011: four years) at a hedge period of 3 months (2011: 3 months) with fixed rate of approximately 2.75%, 2.42% and 2.41% (2011: approximately 2.75%, 2.42% and 2.41% respectively) and floating rate as LIBOR + 0.75% (2011: LIBOR + 0.75%). The non-current portion of the derivatives is not material and is included in current portion. Cash flows and any impact to profit or loss arising from the above use of floating-to-fixed interest rate swap contracts are expected to occur within each hedge period of 3 months over the contract period.

For the year ended December 31, 2012, the ineffective hedging portion of the changes in fair values of the forward foreign exchange contracts of approximately RMB 20.4 million (2011: RMB1.9 million) was recognized as selling, general and administrative expenses in the consolidated income statement. The effective hedging portion was recognized as current portion of derivatives financial instruments in the consolidated balance sheet.

The fair values of the forward foreign exchange contracts are estimated based on the discounted cash flows between the contract forward rate and spot forward rate. The fair values of the interest rate swap contracts are estimated based on the discounted cash flows between the contract floating rate and the contract fixed rate.

F-73

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

39. CONTINGENT VALUE RIGHTS SHARES LIABILITIES

	2012		2011
	RMB’000		RMB’000
Balance at January 1		—		—
Acquisition of Gloucester		1,312,913		—
Change in fair value		79,423		—
Exchange re-alignment		39,852		—
Balance at December 31		1,432,188		—

For more information about contingent value rights shares liabilities, please refer to note 46.

40. LONG-TERM PAYABLE AND PROVISION

	At December 31,
	2012		2011
	RMB’000		RMB’000
Current liabilities
- Deferred payment for acquisition of interests in Minerva (i)		3,268		3,205
- Mining right compensation fee payable (ii)		396,285		—
		399,553		3,205
Non-current liabilities
- Deferred payment for acquisition of interests in Minerva (i)		8,088		8,159
- Mining right compensation fee payable (ii)		1,585,139		—
- Others (iii)		470,695		6,869
		2,063,922		15,028
Total		2,463,475		18,233

(i) The carrying value of the deferred payment for acquisition of interests in Minerva is based on cash flows discounted using a rate of 7.5%.

(ii) Mining right compensation fee payable is provided in accordance with the Chinese government legislation on mining right compensation fee. The amount is payable by instalment from 2012 to 2017.

(iii) Others mainly comprised of provision for marketing service fee of RMB39,971,000 and provision for forecasted excessive supply for port and rail contracts of RMB402,331,000, both arising from the acquisition of Gloucester.

F-74

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

41. DEFERRED TAXATION

	Available- for-sale investment			Accelerated tax depreciation			Fair value adjustment on mining rights (mining reserves)			Temporary differences  on income and expenses recognized			Tax losses			Cash flow hedge reserve			Total
	RMB’000			RMB’000			RMB’000			RMB’000			RMB’000			RMB’000			RMB’000
Balance at January 1, 2011		(28,805	)		(305,353	)		(703,582	)		(774,162	)		363,478			(28,617	)		(1,477,041	)
Exchange re-alignment		—			3,846			87,322			25,090			(8,008	)		—			108,250
Acquisition of additional interests in joint venture		—			—			(49,246	)		—			—			—			(49,246	)
Acquisition of Syntech		—			—			(81,370	)		55,728			—			—			(25,642	)
Acquisition of Premier Coal and Wesfarmers Char		—			—			(69,154	)		51,305			—			—			(17,849	)
Acquisition of Xintai		—			—			(817,296	)		—			—			—			(817,296	)
Charge to other comprehensive income		5,190			—			—			—			—			62,073			67,263
Charge (credit) to the consolidated income statement (note 12)		—			70,100			(550,430	)		487,222			(355,470	)		—			(348,578	)
Balance at December 31, 2011		(23,615	)		(231,407	)		(2,183,756	)		(154,817	)		—			33,456			(2,560,139	)
Exchange re-alignment		—			(2,253	)		(90,646	)		191,400			16,160			—			114,661
Acquisition of Beisu and Yangcun		—			—			(47,375	)		4,109			—			—			(43,266	)
Acquisition of Gloucester		—			—			(1,851,996	)		778,477			258,003			—			(815,516	)
Charge (credit) to other comprehensive income		1,481			—			—			—			—			(28,641	)		(27,160	)
Deferred tax arising from the restructuring of Australian subsidiaries		—			—			—			(141,067	)		—			—			(141,067	)
Charge (credit) to the consolidated income statement (note 12)		—			(9,227	)		538,989			(46,703	)		864,585			—			1,347,644
Balance at December 31, 2012		(22,134	)		(242,887	)		(3,634,784	)		631,399			1,138,748			4,815			(2,124,843	)

The temporary differences on income and expenses recognized mainly arose from unpaid provision of salaries and wages, provisions of compensation fees for mining rights and land subsidence, restoration, rehabilitation and environmental costs and also included payments on certain expenses such as exploration costs and certain income in Australia.

The following is the analysis of the deferred tax balances for financial reporting purposes:

	At December 31,
	2012			2011
	RMB’000			RMB’000
Deferred tax assets		5,605,284			1,335,165
Deferred tax liabilities		(7,730,127	)		(3,895,304	)
		(2,124,843	)		(2,560,139	)

At the balance sheet date, the Group has unused tax losses of RMB5,930 million (2011: RMB1,560 million) contributed by the subsidiaries available for offset against future profits. RMB1,138 million deferred tax asset has been recognized (2011: nil) for such losses. No deferred tax asset has been recognized in respect of the RMB2,134 million (2011: RMB1,560 million) due to the unpredictability of future profit streams. Included in unrecognized tax losses are losses of RMB298 million that will expire in 2013, losses of RMB357 million that will expire in 2014, losses of RMB517 million that will expire in 2015 and loss of RMB282 million that will expire in 2016. (2011: losses of RMB298 million that will expire in 2013 and losses of RMB357 that will expire in 2014). Other losses may be carried forward indefinitely. By reference to financial budgets, management believes that there will be sufficient future profits for the realization of deferred tax assets which have been recognized in respect of tax losses.

F-75

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

42. SHAREHOLDERS’ EQUITY

Share capital

The Company’s share capital structure at the balance sheet date is as follows:

	Domestic invested shares				Foreign invested shares H shares (including H shares represented by ADS)		Total
	State legal person shares  (held by the Parent Company)		A shares
Number of shares
At January 1, 2011, January 1, 2012 and December 31, 2012		2,600,000,000		360,000,000		1,958,400,000		4,918,400,000
	Domestic invested shares				Foreign invested shares H shares (including H shares represented by ADS)		Total
	State legal person shares (held by the Parent Company)		A shares
	RMB’000		RMB’000		RMB’000		RMB’000
Registered, issued and fully paid
At January 1, 2011, January 1, 2012 and December 31, 2012		2,600,000		360,000		1,958,400		4,918,400

Each share has a par value of RMB1.

The Company has completed the implementation of the share reform plan on April 3, 2006 and the non-tradable legal person shares held by the Parent Company become tradable shares. The Parent Company guaranteed that it would not trade these shares in the market within 48 months from that day. All the commitment made by the Parent Company as part of the share reform plan was fulfilled. By application to local legislation, shares held by the Parent Company will become tradable shares. During the year, the Parent Company has fulfilled all the requirements. Up to the issue of these financial statements, there is no application for the right of shares trading in the market by the Parent Company and hence the shares held by the Parent Company are still not yet tradable.

Reserves

Future Development Fund

Pursuant to regulation in the PRC, the Company, Shanxi Tianchi and Heze are required to transfer an annual amount to a future development fund at RMB6 per tonne of raw coal mined (Xintai and Ordos: RMB6.5 per tonne of raw coal mined). The fund can only be used for the future development of the coal mining business and is not available for distribution to shareholders.

From 2008 onwards, Shanxi Tianchi is required to transfer an additional amount at RMB5 per tonne of raw coal mined as coal mine transformation fund.

F-76

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

42. SHAREHOLDERS’ EQUITY—Continued

Pursuant to the regulations of the Shandong Province Finance Bureau, State-owned Assets Supervision and Administration Commission of Shandong Province and the Shandong Province Coal Mining Industrial Bureau, the Company is required to transfer an additional amount at RMB5 per tonne of raw coal mined from July 1, 2004 to the reform specific development fund for the future improvement of the mining facilities and is not distributable to shareholders. No further transfer to the reform specific development fund is required from January 1, 2008.

In accordance with the regulations of the State Administration of Work Safety, the Company has a commitment to incur RMB8 (Shanxi Tianchi: RMB50, Xintai and Ordos: increased from RMB7 to RMB15 from February 1, 2012 onwards) for each tonne of raw coal mined from May 1, 2004 which will be used for enhancement of safety production environment and improvement of facilities (“Work Safety Cost”). From February 1, 2012 onwards, the work safety cost increased to RMB15 per tonne. In prior years, the work safety expenditures are recognized only when acquiring the fixed assets or incurring other work safety expenditures. The Company, Heze, Shanxi Tianchi, Xintai and Ordos make appropriation to the future development fund in respect of unutilized Work Safety Cost from 2008 onwards.

In accordance with the regulations of the State Administration of Work Safety, the Company’s subsidiaries, Hua Ju Energy, Shanxi Tianhao and Yulin, have a commitment to incur Work Safety Cost at the rate of: 4% of the sales income for the year below RMB10 million; 2% of the actual sales income for the year between RMB10 million and RMB100 million (included); 0.5% of the actual sales income for the year between RMB100 million and RMB1 billion (included); 0.2% of the actual sales income for the year above RMB1 billion. The unutilized Work Safety Cost at December 31, 2012 was RMB1,019,799,000.

Statutory Common Reserve Fund

The Company and its subsidiaries in the PRC have to set aside 10% of its profit for the statutory common reserve fund (except where the fund has reached 50% of its registered capital). The statutory common reserve fund can be used for the following purposes:

• to make good losses of the previous years; or

• to convert into capital, provided such conversion is approved by a resolution at a shareholders’ general meeting and the balance of the statutory common reserve fund does not fall below 25% of the registered capital.

Retained earnings

In accordance with the Company’s Articles of Association, the profit for the purpose of appropriation will be deemed to be the lesser of the amounts determined in accordance with (i) PRC accounting standards and regulations and (ii) IFRS or the accounting standards of the places in which its shares are listed.

The Company can also create a discretionary reserve in accordance with its Articles of Association or pursuant to resolutions which may be adopted at a meeting of shareholders.

The Company’s distributable reserve as at December 31, 2012 is the retained earnings computed under PRC GAAP which amounted to approximately RMB23,733,069,000 (At December 31, 2011: RMB22,913,403,000).

F-77

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

43. CAPITAL RISK MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximizing the return to shareholders through the optimization of the debt and equity balance. The Group’s overall strategy remains unchanged from prior year.

The capital structure of the Group consists of debt, which includes the borrowings disclosed in note 37 and equity attributable to equity holders of the Company, comprising issued share capital, reserves and retained earnings, and amounted to RMB86,822,738,000 (2011: RMB77,092,310,000) as at December 31, 2012.

The directors of the Company review the capital structure regularly. As part of this review, the directors of the Company assess the annual budget prepared by the accounting and treasury department and consider and evaluate the cost of capital and the risks associated with each class of capital. The Group will balance its capital structure through the payment of dividends, issue of new shares and new debts or the repayment of existing debts.

44. FINANCIAL INSTRUMENTS

44a. Categories of financial instruments

	At December 31,
	2012		2011
	RMB’000		RMB’000
Financial assets
Loans and receivables (including cash and cash equivalents)		27,145,339		26,863,250
Available-for-sale financial assets		207,076		372,800
Derivative financial instruments		90,731		104,910
Royalty receivable (financial assets at fair value through profit or loss)		1,349,447		—
Financial liabilities
Amortized cost		57,348,667		41,576,750
Derivative financial instruments		128,077		222,089
Contingent value rights shares liabilities (financial liabilities at fair value through profit or loss)		1,432,188		—

44b. Financial risk management objectives and policies

The Group’s major financial instruments include available-for-sale equity instruments, bills and accounts receivable, royalty receivable, other current assets such as other receivables, bank balances and cash, term deposits, restricted cash, long term receivables, derivative financial instruments, bills and accounts payable, other payables, bank and other borrowings, amount due to Parent Company and its subsidiary companies, contingent value rights shares liabilities, finance lease liabilities and guaranteed notes. Details of these financial instruments are disclosed in respective notes. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. The management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner. There has been no significant change to the Group’s exposure to market risk or the manner in which it manages and measures the risk.

F-78

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

44. FINANCIAL INSTRUMENTS—Continued

44b. Financial risk management objectives and policies—Continued

Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group.

At December 31, 2012 and 2011, the Group’s maximum exposure to credit risk which will cause a financial loss to the Group arising from the failure to perform their obligations in relation to each class of recognized financial assets is the carrying amount of those assets as stated in the consolidated balance sheet.

In order to minimise the credit risk, the management of the Group has delegated a team responsible for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade debt at each balance sheet date to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the directors of the Company consider that the Group’s credit risk is significantly reduced.

The Group maintains its cash and cash equivalents with reputable banks and Yankuang Group Finance Group Company Limited (see note 29). Therefore, the directors consider that the credit risk for such is minimal.

The Group generally grants the customers with long-relationship credit terms not exceeding 180 days, depending on the situations of the individual customers. For small to medium sized new customers, the Group generally requires them to pay for the products before delivery.

Most of the Group’s domestic sales are sales to electric power plants, metallurgical companies, construction material producers and railway companies. The Group generally has established long-term and stable relationships with these companies. The Group also sells its coal to provincial and city fuel trading companies.

As the Group’s PRC operation does not currently have direct export rights, all of its export sales must be made through National Coal Corporation, Shanxi Coal Corporation or Minmetals Trading. The qualities, prices and final customer destinations of the Group’s export sales are determined by the Group, National Coal Corporation, Shanxi Coal Corporation or Minmetals Trading.

For the years ended December 31, 2012, 2011 and 2010, net sales to the Group’s five largest customers accounted for approximately 19.4%, 19.4% and, 24.7% respectively, of the Group’s total revenue. Net sales to the Group’s largest customer accounted for 6.3%, 8.5%, and 13.0% of the Group’s net revenue for the years ended December 31, 2012, 2011 and 2010 respectively. The Group’s largest customer was Huadian Power International Corporation Limited (“Huadian”) for the years ended December 31, 2012, 2011 and 2010.

F-79

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

44. FINANCIAL INSTRUMENTS—Continued

44b. Financial risk management objectives and policies—Continued

Credit risk—Continued

Details of the accounts receivable from the five customers with the largest receivable balances at December 31, 2012 and 2011 are as follows:

	Percentage of accounts receivable
	At December 31,
	2012			2011
Five largest receivable balances		28.86	%		60.47	%

The management considers the strong financial background and good creditability of these customers, and there is no significant uncovered credit risk.

The table below shows the credit limit and balance of 5 major counterparties at the balance sheet date:

		December 31, 2012				December 31, 2011
Counterparty	Location	Credit limit		Carrying amount		Credit limit		Carrying amount
		RMB’000		RMB’000		RMB’000		RMB’000
Company A	China		Not applicable		72,000		Not applicable		—
Company B	Japan		Not applicable		54,513		Not applicable		—
Company C	Australia		Not applicable		50,477		Not applicable		—
Company D	Japan		Not applicable		49,156		Not applicable		—
Company E	Japan		Not applicable		41,971		Not applicable		—
Company F	Australia		Not applicable		—		Not applicable		181,164
Company G	Australia		Not applicable		—		Not applicable		94,248
Company H	Hong Kong		Not applicable		—		Not applicable		80,156
Company I	Korea		Not applicable		—		Not applicable		69,566
Company J	Hong Kong		Not applicable		—		Not applicable		69,482
					268,117				494,616

The Group’s geographical concentration of credit risk is mainly in East Asia (excluding the PRC) and Australia. As at December 31, 2012 and 2011, over 57% and 86% of the Group’s total trade receivables were from Australia and from East Asia (excluding the PRC) respectively.

F-80

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

44. FINANCIAL INSTRUMENTS—Continued

44b. Financial risk management objectives and policies—Continued

Market risk

(i) Currency risk

The Group’s sales are denominated mainly in the functional currency of the relevant group entity making the sale, whilst costs are mainly denominated in the group entity’s functional currency. Accordingly, there is no significant exposure to foreign currency risk.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities in currencies other than the functional currencies of the relevant group entities at the balance sheet date are as follows:

	Liabilities				Assets
	2012		2011		2012		2011
	RMB’000		RMB’000		RMB’000		RMB’000
United States Dollar (“USD”)		18,294,655		19,309,802		2,267,878		1,025,746
Euro (“EUR”)		1,083,858		—		141		205
Hong Kong Dollar (“HKD”)		—		—		58		452
Notional amounts of sell USD foreign exchange contracts used for hedging		1,599,728		1,996,267		4,536,734		2,836,035
Notional amount of buy EUR foreign exchange contracts used for hedging		—		—		165,711		—
Notional amount of buy British pound (“GBP”) foreign exchange contracts used for hedging		—		—		2,919		—

The sales of the Group’s subsidiaries in Australia are mainly export sales and some of their fixed assets are imported from overseas. Their foreign exchange hedging policy is disclosed in note 38. The Group’s operations in the PRC do not adopt any foreign exchange hedging policy.

F-81

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

44. FINANCIAL INSTRUMENTS—Continued

44b. Financial risk management objectives and policies—Continued

Market risk—Continued

(i) Currency risk—Continued

Sensitivity analysis

The Group is mainly exposed to the fluctuation against between Renminbi (“RMB”) and United States Dollar (“USD”) or Hong Kong Dollar (“HKD”) and between Australian Dollar (“AUD”) and USD.

The following table details the Group’s sensitivity to a 5% increase and decrease in RMB against relevant foreign currencies. 5% represents management’s assessment of reasonably possible changes in foreign exchange rates over the period until the next annual balance sheet date. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year end for a 5% change in foreign currency rates and also assumes all other risk variables remained constant. The sensitivity analysis includes loans to foreign operations within the Group where the denomination of the loan is in a currency other than the functional currency of the lender or the borrower.

	USD Impact (note i)						HKD Impact (note i )
	2012			2011			2012			2011
	RMB’000			RMB’000			RMB’000			RMB’000
Increase (Decrease) to profit and loss
- if RMB weakens against respective foreign currency		218,169			14,311			2			17
- if RMB strengthens against respective foreign currency		(218,169	)		(14,311	)		(2	)		(17	)

	USD Impact (note ii)
	2012			2011
	RMB’000			RMB’000
Increase (Decrease) to profit and loss
- if AUD weakens against respective foreign currency		(758,859	)		(873,588	)
- if AUD strengthens against respective foreign currency		758,859			873,588
Increase (Decrease) to shareholders’ equity
- if AUD weakens against respective foreign currency		(538,200	)		(680,643	)
- if AUD strengthens against respective foreign currency		538,200			680,643

F-82

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

44. FINANCIAL INSTRUMENTS—Continued

44b. Financial risk management objectives and policies—Continued

Market risk—Continued

(i) Currency risk—Continued

Notes:

(i) This is mainly attributable to the exposure of the Group’s outstanding bank deposit and loans denominated in USD and HKD.

(ii) This is mainly attributable to the exposure of the Group’s outstanding foreign currency bank borrowings and derivative financial instruments denominated in a currency other than the functional currency of the borrower.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the year end exposure does not reflect the exposure during the year.

(ii) Interest rate risk

The Group is exposed to cash flow interest rate risk in relation to variable-rate bank balances, term deposits, restricted cash (note 17) and variable rate borrowings (note 37).

The interest rate hedging policy of the Group is disclosed in note 38.

The Group’s exposures to interest rate risk on financial assets and financial liabilities are detailed in the liquidity risk section of this note. The Group’s cash flow interest rate risk is mainly concentrated on the fluctuation of the PBOC arising from the Group’s RMB borrowings and the LIBOR arising from the Group’s foreign currencies borrowings.

F-83

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

44. FINANCIAL INSTRUMENTS—Continued

44b. Financial risk management objectives and policies—Continued

Market risk—Continued

(ii) Interest rate risk—Continued

Sensitivity Analysis

The following table details the Group’s sensitivity to a change of 100 basis points in the interest rate, assuming the financial instruments outstanding at the end of the reporting period were outstanding for the whole year and all the variables were held constant. It includes the interest rate fluctuation of the abovementioned PBOC rate and LIBOR.

	2012			2011
	RMB’000			RMB’000
Increase (Decrease) to profit and loss
-If increases by 100 basis points		(176,676	)		(114,257	)
-If decreases by 100 basis points		176,676			114,257
Increase (Decrease) to shareholders’ equity
-If increases by 100 basis points		(153,106	)		(78,815	)
-If decreases by 100 basis points		153,106			78,815

(iii) Other price risk

In addition to the above risks relating to financial instruments, the Group is exposed to equity price risk through investment in listed equity securities and also to price risk in non financial instruments such as steel and metals (the Group’s major raw materials). The Group currently does not have any arrangement to hedge the price risk exposure of its investment in equity securities and its purchase of raw materials. The Group’s exposure to equity price risk through investment in listed equity securities and also the result of the sensitivity analysis is not significant.

F-84

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

44. FINANCIAL INSTRUMENTS—Continued

44b. Financial risk management objectives and policies—Continued

Liquidity risk

In the management of the liquidity risk, the Group monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. The management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

The following table details the Group’s remaining contractual maturity for its financial liabilities. For non-derivative financial liabilities, the table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows.

Liquidity and interest risk tables

	Weighted average  effective interest rate			Less than 3 months		3-6 months		6 months to 1 year		1-5 years		5+ years		Total undiscounted cash flow		Carrying amount at 12.31
	%			RMB’000		RMB’000		RMB’000		RMB’000		RMB’000		RMB’000		RMB’000
2012
Non-derivative financial liabilities
Bills and accounts payables		N/A			6,793,293		18,467		—		—		—		6,811,760		6,811,760
Other payables		N/A			7,454,033		—		—		—		—		7,454,033		7,454,033
Amount due to Parent Company and its subsidiary companies		N/A			93,712		—		—		—		—		93,712		93,712
USD Guaranteed note		4.62%-5.80	%		81,058		81,058		162,116		4,054,258		4,349,975		8,728,465		6,284,835
RMB Guaranteed note		4.42%-5.00	%		—		—		240,000		1,960,000		4,990,000		7,190,000		4,953,000
Loan pledged by machineries		6.56	%		32,800		2,015,367		—		—		—		2,048,167		2,000,000
Finance lease liabilities		7.74	%		11,207		11,207		22,415		193,473		27,090		265,392		232,690
Bank borrowings - variable rate		1.06%-6.90	%		599,726		1,501,707		3,717,194		7,085,626		17,933,866		30,838,119		27,525,857
Long-term payable		4.98%-6.50	%		1,583		—		521,163		2,086,372		—		2,609,118		1,992,780
Contingent value rights shares liabilities		N/A			—		—		—		1,432,188		—		1,432,188		1,432,188
					15,067,412		3,627,806		4,662,888		16,811,917		27,300,931		67,470,954		58,780,855
Financial guarantees issued
Maximum amount guaranteed (note)		N/A			—		—		—		—		2,212,915		2,212,915		—
Derivative financial instruments – gross settlement
Forward foreign exchange contracts - Outflow		N/A			1,580,690		—		19,038		—		—		1,599,728		1,599,728
Derivative financial instruments – net settlement
Interest rate swap contracts		N/A			19,462		19,462		40,006		35,491		—		114,421		114,421

Note: the amount presented is the maximum contractual presented under guarantees issued.

F-85

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

44. FINANCIAL INSTRUMENT—Continued

44b. Financial risk management objectives and policies—Continued

Liquidity risk—Continued

Liquidity and interest risk tables—Continued

	Weighted average  effective interest rate			Less than 3 months		3-6 months		6 months to 1 year		1-5 years		5+ years		Total undiscounted cash flow		Carrying amount at 12.31
	%			RMB’000		RMB’000		RMB’000		RMB’000		RMB’000		RMB’000		RMB’000
2011
Non-derivative financial liabilities
Bills and accounts payables		N/A			2,205,968		34,876		—		—		—		2,240,844		2,240,844
Other payables		N/A			4,514,097		—		—		—		—		4,514,097		4,514,097
Amount due to Parent Company and its subsidiary companies		N/A			352,625		—		—		—		—		352,625		352,625
Bank borrowings - variable rate		2.76%-6.90	%		7,845,689		2,344,366		10,279,014		15,970,348		34,020		36,473,437		34,457,820
Long-term payable		6.50	%		1,535		—		1,474		9,807		—		12,816		11,364
					14,919,914		2,379,242		10,280,488		15,980,155		34,020		43,593,819		41,576,750
Financial guarantees issued
Maximum amount guaranteed (note)		N/A			—		—		—		—		1,392,566		1,392,566		—
Derivative financial instruments – gross settlement
Forward foreign exchange contracts - Outflow		N/A			180,014		695,818		1,118,038		—		—		1,993,870		1,993,870
Derivative financial instruments – net settlement
Interest rate swap contracts		N/A			30,552		30,552		62,802		55,712		—		179,618		179,618

Note: the amount presented is the maximum contractual presented under guarantees issued.

44c. Fair values

The fair value of available-for-sales investment is determined with reference to quoted market price. The fair values of the forward foreign exchange contracts are estimated based on the discounted cash flows between the contract forward rate and spot forward rate. The fair values of interest rate swap contracts are estimated based on the discounted cash flows between the contract floating rate and contract fixed rate. The fair value of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis.

The directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortized cost in the consolidated financial statements approximate their fair values.

F-86

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

44. FINANCIAL INSTRUMENTS—Continued

44c. Fair values—Continued

Fair values of financial assets and financial liabilities are determined as follows:

The following table presents the carrying value of financial instruments measured at fair value across the three levels of the fair value hierarchy defined in IFRS 7 (Amendment). The levels of fair value are defined as follows:

Level 1:	fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets and liabilities;
Level 2:	fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3:	fair value measurements are those derived from valuation techniques that include inputs for the assets or liability that are not based on observable market data (unobservable inputs).

	Level 1		Level 2		Level 3		At December  31 Total
	RMB’000		RMB’000		RMB’000		RMB’000
2012
Assets
Available-for-sale investments
- Investments in securities listed on the SSE		167,572		—		—		167,572
Derivative financial instruments
- Forward foreign exchange contracts		—		76,640		—		76,640
- Collar option		—		14,091		—		14,091
Financial assets at fair value through profit or loss
- Royalty receivable		—		—		1,349,447		1,349,447
		167,572		90,731		1,349,447		1,607,750
Liabilities
Derivative financial instruments
- Forward foreign exchange contracts		—		13,656		—		13,656
- Interest rate swap contracts		—		114,421		—		114,421
Financial liabilities at fair value through profit or loss
- Contingent value rights shares liabilities		1,432,188		—		—		1,432,188
		1,432,188		128,077		—		1,560,265

F-87

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

44. FINANCIAL INSTRUMENTS—Continued

44c. Fair values—Continued

	Level 1		Level 2		Level 3		At December  31 Total
2011
Assets
Available-for-sale investments
- Investments in securities listed on the SSE		173,495		—		—		173,495
Derivative financial instruments
- Forward foreign exchange contracts		—		104,910		—		104,910
		173,495		104,910		—		278,405
Liabilities
Derivative financial instruments
- Forward foreign exchange contracts		—		42,471		—		42,471
- Interest rate swap contracts		—		179,618		—		179,618
		—		222,089		—		222,089

There were no transfers between Levels 1 and 2 during the year ended December 31, 2012 and 2011.

F-88

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

45. ACQUISITION OF BEISU AND YANGCUN

	Carrying amounts			Fair value Adjustments			Fair values
	RMB’000			RMB’000			RMB’000
Bank balances and cash		8,131			—			8,131
Accounts receivable and other receivables		96,626			—			96,626
Inventories		2,731			286			3,017
Interests in associates		3,927			—			3,927
Property, plant and equipment, net		285,515			—			285,515
Intangible assets		275,097			189,503			464,600
Accounts payable and other payables		(708,584	)		1,982			(706,602	)
Deferred taxation		4,181			(47,447	)		(43,266	)
Provision for land subsidence, restoration, rehabilitation and environmental costs		(20	)		—			(20	)
Net assets acquired								111,928
Goodwill arising on acquisition								712,214
								824,142
Considerations:
Cash paid on acquisition								824,142
Net cash outflow arising on acquisition:
Cash outflow arising on acquisition								(824,142	)
Bank balance and cash acquired								8,131
								(816,011	)

During the period from the acquisition date to 31 December 2012, Beisu and Yangcun did not contribute any significant revenue or profit to the Group. Goodwill arose because the Group can increase its production capacity in coal and the coverage of exploration from this acquisition.

F-89

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

46. ACQUISITION OF GLOUCESTER

During the year, a wholly-owned subsidiary of the Company, Yancoal Australia, merged with Gloucester. The merger was completed on June 27, 2012. Yancoal Australia acquired Gloucester at a consideration of a combination of 218,727,665 ordinary shares of Yancoal Australia and 87,645,184 CVR shares. Gloucester is a company listed on the ASX. Following the completion of the merger, Yancoal Australia is separately listed on the ASX, replacing the listing position of Gloucester. The ordinary shares and CVR shares of Yancoal Australia were listed on the ASX on June 28, 2012. Gloucester mainly engaged in production of coking coal and thermal coal. The net assets acquired were included in the mining segment.

The acquisition has been accounted for using the acquisition method.

The net assets acquired on the acquisition date are as follows:

	Carrying amounts			Fair value Adjustments			Fair values
	RMB’000			RMB’000			RMB’000
Bank balances and cash		237,315			—			237,315
Accounts receivable and other receivables		605,407			(379,589	)		225,818
Inventories		232,490			(3,076	)		229,414
Investments in jointly control entities		1,951,741			(814,218	)		1,137,523
Investment in securities		47,026			—			47,026
Royalty receivable		1,243,158			46,857			1,290,015
Property, plant and equipment, net		2,611,394			761,968			3,373,362
Construction in progress		257,395			93,729			351,124
Intangible assets		4,908,788			710,512			5,619,300
Long term receivables		1,329,578			—			1,329,578
Accounts payable and other payables		(3,988,052	)		71,332			(3,916,720	)
Provision for land subsidence, restoration, rehabilitation and environmental costs		(100,145	)		—			(100,145	)
Long term payables		(1,324,852	)		781,691			(543,161	)
Tax recoverable		14,978			—			14,978
Deferred taxation		(1,283,674	)		468,158			(815,516	)
Borrowings		(3,725,732	)		—			(3,725,732	)
Net assets acquired								4,754,179
Gain on bargain purchase								(1,269,269	)
								3,484,910
Considerations:
Fair value of ordinary shares issued by Yancoal Australia								2,138,130
Fair value of CVR shares issued								1,312,913
Direct expenses incurred on the issuance of ordinary shares and CVR shares of Yancoal Australia								33,867
								3,484,910
Net cash inflow arising on acquisition:
Bank balance and cash acquired								237,315

F-90

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

46. ACQUISITION OF GLOUCESTER—Continued

Bargain purchase arises because the consideration (number of shares to be issued) was fixed when the merger proposal was announced. Upon the date of completion, the market capitalization and the market price of shares dropped and hence the total consideration paid were less than the fair value of net identifiable assets acquired because there is no mechanism to adjust the number of shares to be issued.

During the period from the acquisition date to December 31, 2012, Gloucester have contributed a total revenue of RMB1,658 million and an operating loss of RMB 387 million.

If the acquisition had occurred on January 1, 2012, the consolidated revenue and net profit of the Group for the year ended December 31, 2012 would have been RMB59,839 million and RMB4,846 million respectively. The proforma financial information is for illustrative purpose only and does not necessarily reflect the Group’s revenue and operating results if the acquisition has been completed by January 1, 2012 and could not serve as a basis for the forecast of future operation result.

The purpose of the issuance of CVR shares is to protect the original shareholders of Gloucester from the fluctuation of the share price of the Yancoal Australia after the merger. If the weighted average price of the last 3 months in the next 18 months after the transaction is lower than AUD6.96 per share, the CVR shares will be redeemed by cash (or shares of Yancoal Australia held by the Company at the discretion of Yancoal Australia) at guaranteed price of AUD6.96 per share. The redemption price will not exceed AUD3 per share. The holders of the CVR shares do not have the power to vote (or shares of the condition that is required by the ASX). Also, the holders of the CVR shares are not entitled to any dividend, right to enroll the new securities and bonus shares that are distributed or issued by Yancoal Australia. The Company are committed to the obligations related to the issuance of the CVR shares by Yancoal Australia.

The valuation of the shares issued by Yancoal Australia and the CVR are stated at market value.

47. ACQUISITION OF THREE SUBSIDIARIES

In 2009, the Group signed a co-operation agreement with an independent third party for the acquisition of 100% equity of Yize. The acquisition was completed on April 30, 2010 with a consideration of RMB179.7 million being paid to the shareholders of Yize.

In 2010, the Group has also completed the acquisition of 100% equity of Inner Mongolia Rongxin Chemical Co., Ltd (“Rongxin Chemicals”) and Inner Mongolia Daxin Industrial Gas Co., Ltd (“Daxin Industrial”) with cash consideration of RMB4.4 million and RMB6 million respectively.

Yize, Rongxin Chemicals and Daxin Industrial have not engaged in any operating activities at the acquisition date and the acquisitions were reflected as purchases of assets and liabilities of which no goodwill was recognized.

F-91

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

47. ACQUISITION OF THREE SUBSIDIARIES—Continued

Net book values of the acquired net assets at acquisition dates are as follow:

	Carrying amounts
	RMB’000
Inventories		7
Prepayments and other receivables		15,600
Property, plant and equipment, net		4,751
Prepaid lease payments		55,418
Intangible assets		131,985
Other payables		(17,666	)
Net assets acquired		190,095
Considerations:
Cash paid on acquisition		133,000
Deposit paid for acquisition of investment in prior year		57,095
		190,095
Net cash outflow arising on acquisition		(133,000	)

48. ACQUISITION OF AN YUAN COAL MINE

In 2010, Ordos signed a co-operation agreement with an independent third party for the acquisition of An Yuan Coal Mine at a consideration of RMB1,435 million. The acquisition was completed during 2011.

The acquisition of An Yuan Coal Mine was classified as purchase of assets and liabilities of which no goodwill was recognized.

Net book values of the acquired net assets at acquisition date are as follow:

	Carrying amounts
	RMB’000
Property, plant and equipment, net		176,067
Intangible assets		1,258,433
Other current assets		500
Net assets acquired		1,435,000
Considerations:
Cash paid on acquisition		355,000
Deposit paid for acquisition of investment in prior year		1,080,000
		1,435,000
Net cash outflow arising on acquisition		(355,000	)

F-92

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

49. ACQUISITION OF ADDITIONAL INTERESTS IN JOINT VENTURE

The Australia subsidiaries of the Group originally held 60% equity interests in Ashton joint venture. During 2011, the Group acquired additional 30% equity interests in Ashton joint venture from another venturer at a consideration of USD250 million. This included the acquisition of 30% equity interests in the jointly controlled entities, Ashton Coal Mines Limited and Australian Coal Processing Holdings Pty Ltd. Upon completion of the acquisition, the Group held 90% equity interest in Ashton joint venture.

Under the shareholders agreement, the 90% equity interest held in Ashton remained classified as a joint venture.

50. ACQUISITION OF SYNTECH

On May 13, 2011, a wholly-owned subsidiary of the Company acquired 100% equity interests in Syntech and its subsidiaries for a cash consideration of AUD208,480,000. The equity transfer was completed on August 1, 2011. The principal business of Syntech and its subsidiaries include exploration, production, sorting and processing of coal, the major product of which is thermal coal. The net assets acquired were included in the mining segment.

This acquisition has been accounted for using the acquisition method.

The net assets of Syntech acquired, and the goodwill arising, are as follows:

	Carrying amounts			Fair value adjustments			Fair values
	RMB’000			RMB’000			RMB’000
Bank balances and cash		51,828			—			51,828
Accounts receivable and other receivables		118,042			—			118,042
Inventories		85,190			28,539			113,729
Property, plant and equipment, net		1,227,053			(301,522	)		925,531
Intangible assets		121,140			271,234			392,374
Accounts and other payables		(219,243	)		—			(219,243	)
Deferred tax		—			(25,642	)		(25,642	)
Provision for land subsidence, restoration, rehabilitation and environmental costs		(14,259	)		—			(14,259	)
Net assets acquired								1,342,360
Goodwill arising on acquisition								25,642
								1,368,002
Total consideration satisfied by:
Cash consideration paid on acquisition								1,368,002
Net cash outflow arising on acquisition:
Cash paid on acquisition								(1,368,002	)
Bank balances and cash acquired								51,828
								(1,316,174	)

The goodwill arising from the acquisition is attributable to the extension of mining reserves in Australia and diversification of operation by the Group, and operational synergies and strategic benefits.

F-93

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

51. ACQUISITION OF PREMIER COAL AND WESFARMERS CHAR

On September 27, 2011, a wholly-owned subsidiary of the Company acquired 100% equity interests of both Premier Coal and Wesfarmers Char as a package for a cash consideration of AUD 313,533,000. The equity transfer was completed on December 30, 2011. For Premier Coal, the principal businesses are exploration, production and processing of coal; for Wesfarmers Char, the principal businesses are the research and development of the technology and procedures in relation to processing coal char from low rank coals. The net assets acquired were included in the mining segment.

This acquisition has been accounted for using the acquisition method.

The net assets of Premier Coal and Wesfarmers Char acquired, and the goodwill arising, are as follows:

	Carrying amounts			Fair value adjustments		Fair values
	RMB’000			RMB’000		RMB’000
Accounts receivable and other receivables		91,416			—		91,416
Inventories		68,956			4,666		73,622
Property, plant and equipment, net		1,484,398			264,216		1,748,614
Intangible assets		—			511,186		511,186
Accounts and other payables		(198,715	)		—		(198,715	)
Deferred tax		(123,377	)		105,528		(17,849	)
Provision for land subsidence, restoration, rehabilitation and environmental costs		(168,847	)		—		(168,847	)
Net assets acquired							2,039,427
Goodwill arising on acquisition							17,849
							2,057,276
Total consideration satisfied by:
Cash consideration paid on acquisition							2,057,276
Net cash outflow arising on acquisition:
Cash paid on acquisition							(2,057,276	)

The goodwill arising from the acquisition is attributable to the extension of mining reserves in Australia and diversification of operation by the Group, and operational synergies and strategic benefits.

F-94

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

52. ACQUISITION OF XINTAI

In 2011, the Company entered into an agreement with independent third party to acquire 80% equity interests in Xintai at a cash consideration of RMB2,801,557,000. The acquisition was completed in 2011. Xintai owns and operates Wenyu Coal Mine located in Inner Mongolia. The principle businesses are coal mining and sales. The net assets acquired were included in the mining segment.

This acquisition has been accounted for using the acquisition method.

The net assets of Xintai acquired and the goodwill arising, are as follows:

	Carrying amounts		Fair value adjustments			Fair values
	RMB’000		RMB’000			RMB’000
Property, plant and equipment, net		182,403		(14,427	)		167,976
Intangible assets		50,362		3,283,608			3,333,970
Deferred tax		—		(817,296	)		(817,296	)
Net assets acquired							2,684,650
Non-controlling interests							(536,930	)
Goodwill arising on acquisition							653,837
							2,801,557
Considerations:
Cash paid on acquisition							2,751,557
Outstanding consideration payable							50,000
							2,801,557
Net cash outflow arising on acquisition
Cash paid on acquisition							(2,751,557	)

The goodwill arising from the acquisition is attributable to the extension of mining reserves and diversification of operation by the Group, and operational synergies and strategic benefits.

F-95

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

53. DISPOSAL OF A JOINT VENTURE

During the year ended December 31, 2010, the Group disposed of its 51% interest in Minerva joint venture to an independent third party at a consideration of AUD191,860,000 (RMB1,235,840,000).

Net assets of joint venture dispose of are as follows:

	Carrying amounts
	RMB’000
Total assets		1,401,548
Total liabilities		(283,636	)
		1,117,912
Gain on disposal of a joint venture		117,928
Total consideration		1,235,840
Cash inflow of the disposal
Cash consideration		1,235,840
Disposal of cash and bank balance		(88,019	)
Net cash inflow from the disposal of Minerva		1,147,821

During 2010, the Group has also disposed of its interests in Minerva Mining Pty Ltd, Minerva Coal Pty Ltd and Felix Coal Sales Pty Ltd, subsidiaries related to the operations of Minerva joint venture. The subsidiaries are not material to the Group and their assets, liabilities and related profit or loss on disposal have been included in the above disposal of a joint venture.

F-96

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

54. RELATED PARTY BALANCES AND TRANSACTIONS

Transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed. Details of balances and transactions between the Group and other related parties are disclosed below.

Balances and transactions with related party

	At December 31,
	2012		2011
	RMB’000		RMB’000
Nature of balances (other than those already disclosed)
Bills and accounts receivable
- Parent Company and its subsidiaries		1,039,461		648,201
- Jointly controlled entities		—		181,164
Prepayments and other receivables
- Parent Company and its subsidiaries		109,662		127,367
- Jointly controlled entities		187,324		198,780
Bills and accounts payable
- Jointly controlled entities		—		181
Other payables and accrued expenses
- Parent Company and its subsidiaries		1,674,286		1,075,627

The amounts due from/to the Parent Company and its subsidiary companies are non-interest bearing, unsecured and repayable on demand.

During the years, the Group had the following significant transactions with the Parent Company and/or its subsidiary companies:

	Year ended December 31,
	2012		2011		2010
	RMB’000		RMB’000		RMB’000
Income
Sales of coal		3,162,122		2,088,794		2,672,424
Sales of auxiliary materials		425,957		485,676		454,254
Sales of heat and electricity		167,295		180,808		235,002
Sales of methanol		47,909		—		—
Expenditure
Utilities and facilities		35,906		31,646		34,006
Purchases of supply materials and equipment		1,552,758		696,802		421,606
Repair and maintenance services		327,600		323,550		262,478
Social welfare and support services		802,540		848,121		794,621
Technical support and training		—		26,000		26,000
Road transportation services		67,654		73,638		64,945
Construction services		689,787		718,155		655,311

Expenditures for social welfare and support services (excluding medical and child care expenses) of RMB176,820,000, RMB269,182,000 and RMB259,575,000 for the years ended December 31, 2012, 2011 and 2010. In addition, no technical support and training expenses charged by the Parent Company for the year ended December 31, 2012 (2011: RMB26,000,000; 2010: RMB26,000,000). These expenses will be negotiated with the Parent Company each year.

F-97

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

54. RELATED PARTY BALANCES AND TRANSACTIONS—Continued

Balances and transactions with related party—Continued

On April 23, 2012, the Company entered into the assets transfer agreement with the Parent Company and its subsidiary to purchase the target assets from the Parent Company and its subsidiary at a consideration of RMB824,142,000 to acquire all the assets and liabilities of Beisu and Yangcun and their equity investments in Beisheng Industry and Trade, Shengyang Wood and Jiemei Wall Materials. Details of this acquisition are set out in note 45.

As at 31 December, 2012, the Company has deposited RMB1,719,621,000 (2011: RMB1,820,000,000; 2010: RMB1,400,000,000) to the Company’s associate, Yan Kuang Group Finance Company Limited. The interest income received and finance cost paid during the year amounted to RMB7,986,000 (2011: RMB7,665,000; 2010: RMB680,000) and RMB1,411,000 (2011: RMB10,119,000; 2010: nil) respectively.

In addition to the above, the Company participates in a retirement benefit scheme of the Parent Company in respect of retirement benefits (note 56).

Balances and transactions with other state-controlled entities in the PRC

The Group operates in an economic environment currently predominated by entities directly or indirectly owned or controlled by the PRC government (“state-controlled entities”). In addition, the Group itself is part of a large group of companies under the Parent Company which is controlled by the PRC government. Apart from the transactions with the Parent Company and its subsidiaries disclosed above, the Group also conducts business with other state-controlled entities. The directors consider those state-controlled entities are independent third parties so far as the Group’s business transactions with them are concerned.

Material transactions with other state- controlled entities are as follows:

	Year ended December 31,
	2012		2011		2010
	RMB’000		RMB’000		RMB’000
Trade sales		10,503,203		8,487,421		9,823,814
Trade purchases		4,500,994		2,597,741		1,581,427

Material balances with other state-controlled entities are as follows:

	At December 31,
	2012		2011
	RMB’000		RMB’000
Amounts due to other state-controlled entities		592,267		580,726
Amounts due from other state-controlled entities		1,361,139		681,413

Amounts due to and from state-controlled entities are trade nature of which terms are not different from other customers (notes 18 and 34).

F-98

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

54. RELATED PARTY BALANCES AND TRANSACTIONS—Continued

In addition, the Group has entered into various transactions, including deposits placements, borrowings and other general banking facilities, with certain banks and financial institutions which are state-controlled entities in its ordinary course of business. In view of the nature of those banking transactions, the directors are of the opinion that separate disclosure would not be meaningful.

Except as disclosed above, the directors are of the opinion that transactions with other state- controlled entities are not significant to the Group’s operations.

Balances and transactions with jointly controlled entities

	At December 31,
	2012		2011
	RMB’000		RMB’000
Due from a jointly controlled entity (refer to note 30)		1,682,983		—

The amount due from a jointly controlled entity is unsecured and interest is calculated at commercial rate, interest received by the Group in the current year amounting to RMB17,831,000.

During the year, sales to the jointly controlled entity by the Group’s Australian subsidiaries amounted to RMB1,030,323,000 (2011: RMB1,363,241,000; 2010: RMB1,202,255,000).

Compensation of key management personnel

The remuneration of directors and other members of key management were as follows:

	Year ended December 31,
	2012		2011		2010
	RMB’000		RMB’000		RMB’000
Directors’ fee		520		484		452
Salaries, allowance and other benefits in kind		5,850		4,864		4,548
Retirement benefit scheme contributions		1,033		834		778
		7,403		6,182		5,778

The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends.

F-99

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

55. COMMITMENTS

	At December 31,
	2012		2011
	RMB’000		RMB’000
Capital expenditure contracted for but not provided for in the consolidated financial statements
Acquisition of property, plant and equipment
- the Group		2,626,207		2,022,362
- share of joint ventures		310,912		179,166
Acquisition of intangible assets
- the Group		—		1,947
- share of joint ventures		30		158
		2,937,149		2,203,633

Pursuant to the regulations issued by the Shandong Province Finance Bureau, the Group has to pay a deposit of RMB2,636 million (2011: RMB2,636 million) to the relevant government authority, which secured for the environmental protection work done by the Company. As at December 31, 2012, deposit of RMB1,567 million (2011: RMB732 million) were made and the Company is committed to further make security deposit of RMB1,069 million (2011: RMB1,904 million).

The Company and four contract parties entered into an agreement to acquire 74.82% interest in Hao Sheng at the consideration of RMB7,159,220,000. As at December 31, 2012, total amount paid by the Company in respect of this investment was RMB2,982,455,000 (2011: RMB2,439,881,000). Details related to acquisition of Hao Sheng are set out in note 31.

56. RETIREMENT BENEFITS

Qualifying employees of the Company are entitled to pension, medical and other welfare benefits. The Company participates in a scheme of the Parent Company and pays a monthly contribution to the Parent Company in respect of retirement benefits at an agreed contribution rate based on the monthly basic salaries and wages of the qualified employees. The Parent Company is responsible for the payment of all retirement benefits to the retired employees of the Company.

Pursuant to the Provision of Insurance Fund Administrative Services Agreement entered into by the Company and the Parent Company on May 8, 2012 (2011: November 7, 2008), the monthly contribution rate is at 20% (2011: 20%; 2010: 20%) of the total monthly basic salaries and wages of the Company’s employees for the period from January 1, 2010 to December 31, 2012. Other welfare benefits will be provided by the Parent Company, which will be reimbursed by the Company.

The amount of contributions paid to the Parent Company were RMB857,352,000, RMB760,906,000, and RMB640,933,000 for the years ended December 31, 2012, 2011, and 2010, respectively.

F-100

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

56. RETIREMENT BENEFITS—Continued

The Company’s subsidiaries are participants in a state-managed retirement scheme pursuant to which the subsidiaries pay a fixed percentage of its qualifying staff’s wages as a contribution to the scheme. The subsidiaries’ financial obligations under this scheme are limited to the payment of the employer’s contribution. During the year, contributions paid and payable by the subsidiaries pursuant to this arrangement were insignificant to the Group. The Group’s overseas subsidiaries pay fixed contribution as pensions under the laws and regulations of the relevant countries.

During the year and at the balance sheet date, there were no forfeited contributions which arose upon employees leaving the above schemes available to reduce the contributions payable in future years.

57. HOUSING SCHEME

The Parent Company is responsible for providing accommodation to its employees and the domestic employees of the Company. The Company and the Parent Company share the incidental expenses relating to the accommodation at a negotiated amount for each of the three years ended December 31, 2012, 2011 and 2010. Such expenses, amounting to RMB137,200,000, RMB140,000,000 and RMB140,000,000 for each of the three years ended December 31, 2012, 2011 and 2010 respectively, have been included as part of the social welfare and support services expenses summarized in note 54.

The Company currently makes a fixed monthly contribution for each of its qualifying employees to a housing fund which is equally matched by a contribution from the employees. The contributions are paid to the Parent Company which utilizes the funds, along with the proceeds from the sales of accommodation and, if the need arises, from loans arranged by the Parent Company, to construct new accommodation.

58. POST BALANCE SHEET EVENT

Subsequent to the balance sheet date, the Company additional paid RMB1,025,516,000 to Jin Cheng Tai in respect of the acquisition of Hao Sheng. Up to the date of the report, the Company in aggregate paid total consideration of RMB4,007,971,000, which equivalent to 63% of the committed amount.

59. MAJOR NON-CASH TRANSACTION

During the year ended December 31, 2012, the Group acquired certain property, plant and equipment, of which RMB3,662,785,000 (2011: RMB2,733,713,000) have not yet been paid.

F-101

YANZHOU COAL MINING COMPANY LIMITED

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

60. OPERATING LEASE COMMITMENTS

	At December 31,
	2012		2011
	RMB’000		RMB’000
Within one year		40,160		7,178
More than one year, but not more than five years		65,756		3,210
		105,916		10,388

Operating leases have average remaining lease terms of 1 to 5 years. Items that are subject to operating leases include mining equipment, office space and small items of office equipment.

61. CONTINGENT LIABILITIES

		At December 31,
		2012		2011
		RMB’000		RMB’000
Guarantees
(a)	The Group
	Guarantees secured over deposits		13,256		—
	Performance guarantees provided to daily operations		1,818,000		1,099,755
	Guarantees provided in respect of the cost of restoration of certain mining leases, given to government departments as required by statute		352,481		263,603
(b)	Joint ventures
	Performance guarantees provided to daily operations		745		731
	Guarantees provided in respect of the cost of restoration of certain mining leases, given to government departments as required by statute		28,432		28,477
			2,212,914		1,392,566

F-102

EX-4.2

EXHIBIT 4.2

Code : 01

Provision of Materials Agreement

between

Yankuang Group Company Limited

and

Yanzhou Coal Mining Company Limited

23 April 2012

This agreement is made and come into force of this day of 23 April 2012 in Zoucheng City, Shangdong Province, between:

Yankuang Group Company Limited, a wholly state-owned enterprise incorporated and validly exists under the laws of PRC with registry number of business license for legal person as 370000018019807 and registered office at 298 Fushannan Road Zoucheng, Shandong Province and its legal representative being Wang Xin (hereinafter referred to as “Yankuang Group”).

Yanzhou Coal Mining Company Limited, a company with limited liability incorporated and validly exists under the laws of PRC listing in the Shanghai Stock Exchange, Hong Kong Stock Exchange and New York Stock Exchange, with registry number of business license for legal person as 370000400001016 and registered office at 298 Fushannan Road Zoucheng, Shandong Province and its legal representative being Li Weimin (hereinafter referred to as “the Company”).

Where:

1. On 25 September 1997, Yankuang Group, as the only promoter, founded the Company pursuant to PRC laws. As part of its reorganization, Yankuang Group injected assets and liabilities relating to its major coal production business into the Company, and Yankuang Group retained the remaining assets and liabilities.

2. After successive IPO and listing of the Company in the Shanghai Stock Exchange, Hong Kong Stock Exchange and New York Stock Exchange, Yankuang Group remains the controlling stockholder of the Company, holding 52.86% of stocks in the Company as at the date hereof.

3. On 31 October 2008, Yankuang Group and the Company entered into Provision of Materials Agreement, which were ratified by independent shareholders on 23 December 2008. This agreement was effective for 3 years from 1 January 2009 to 31 December 2011. Pursuant to the original Provision of Materials Agreement, Yankuang Group daily provided the Company with materials.

4. According to the latest development, Yankuang Group also provides small amount of coal products to the Company in addition to its continued provision of materials.

Pursuant to Contract Law of the People’s Republic of China, relevant laws and regulations, and local regulatory requirements in the listing locations of the Company, Yankuang Group and the Company, through friendly discussion, agree on provision of labour and services as follow:

1. Definition and explanations

1.1 Definition

Terms herein have the following meaning unless otherwise required by the context:

“Fiscal year”	refers to	each year from 1 January to 31 December;
“Half year”	refers to	from 1 January to 30 June or from 1 July to 31 December for each fiscal year;
“Agreed Provision”	refers to	the provision of materials;
“Hong Kong Stock Exchange”	refers to	the Stock Exchange of Hong Kong Limited;
“Market price”	refers to	the market price of agreed provision calculated pursuant to clause 4.2 of the agreement in applicable circumstances;
Materials	refers to	Production materials such as cement and mining cables, and equipment, materials and coal provided by Yankuang Group and its subsidiaries or associated persons to the Company and its subsidiaries pursuant to clause 2.1 of the agreement;
“PRC”	refers to	People’s Republic of China;
“RMB”	refers to	Renminbi, the legal currency of PRC;
“Previous Connected Transaction Agreement”	refers to	the Provision of Materials Agreement entered between Yankuang Group and the Company on 31 October 2008;
“State regulated price”	refers to	price of agreed provision set in accordance with clause 4.3; and
“Subsidiaries”	refers to	the holding subsidiaries and other affiliates of Yankuang Group and the Company.

1.2 Explanation

Unless the contrary intention appears,

(1) Where the provision of materials is involved herein, both Yankuang Group and the Company shall refer to itself as well as its subsidiaries. Yankuang Group also includes its associated persons from time to time (“associated persons” has the meaning ascribed to it in the Rules Governing the Listing of Securities of the Stock Exchange of Hong Kong Limited). In this agreement, the subsidiaries of Yankuang Group exclude the Company and its subsidiaries;

(2) Any party in the agreement and any other agreements includes its successors or approved assignees (if any);

(3) Clauses and appendixes refer to clauses and appendixes hereof;

(4) Any clauses herein shall not be interpreted as the prohibition to postponing, revision, modification or supplement of the agreement;

(5) The title of the agreement is intended for convenience purpose only and shall not affect the content and explanation hereof.

2. Agreed provision

2.1 Agreed provision provided by Yankuang Group to the Company in accordance with the agreement includes but not limited to: materials including cement, belt, mining cable, supporting roller, timber, bearing, and mining equipment including hydraulic support and belt conveyor, and other similar material and coal.

2.2 Yankuang Group shall provide the Company with agreed provision pursuant to the terms hereof and specific terms (including but not limited to quantity and quality) in written agreements entered between both parties from time to time.

2.3 Yankuang Group undertakes that, in any case, the charge for provision of materials by Yankuang Group shall not be higher than that to an independent third party. In appropriate circumstances, Yankuang Group offers favourable price.

2.4 Pursuant to the clauses and terms in this agreement, the Company shall be entitled to purchase materials from Yankuang Group. For the avoidance of doubt, the Company shall not be obligated to purchase materials from Yankuang Group unless otherwise confirmed in written from time to time.

2.5 If case of more favourable terms and conditions for provision of the same materials by any third party, or where the materials provided by Yankuang Group fail to satisfy the Company in any aspect (including quality, quantity), the Company shall have the right to purchase the same materials from a third party. For the avoidance of doubt, in any case, the Company shall not be obligated to comply with the purchase agreed provision solely from Yankuang Group.

3. Execution

3.1 The Company shall submit the materials demand plan for the coming year or service adjustment plan for the current year (“annual provision plan”) to Yankuang Group prior to 31 November each year. The parties shall agree on the plan before 31 December of the year. Where the materials demand plan of the Company for the coming year is identical to the current year, Yankuang Group shall perform such plan.

3.2 The parties and their subsidiaries and associated person of Yankuang Group shall enter into specific materials provision contracts in accordance with this agreement (including annual provision plan developed under this agreement).

3.3 Annual provision plans or specific provision contracts can be adjusted during the course of execution upon agreement by both parties where necessary.

3.4 Payments for agreed provision can be made in one time or by instalments.

3.5 Both parties shall record account payable or account receivable of continuing connected transaction into the account book before the last business day of each calendar month. All the payments of continuing connected transaction of each calendar month other than the outstanding transaction or disputed ones shall be settled in the next month.

4. Pricing basis of agreed provision

4.1 Prices of agreed provision shall be determined in accordance with market price, which should be calculated and estimated before the beginning of the fiscal year where possible.

4.2 Prices of agreed provision shall be determined in accordance with market price and general commercial terms as below:

(1) The prices of identical or similar agreed provision by an independent third party in the area of provision or in the vicinity in accordance with general commercial terms during its daily business operation; or

(2) Where item (1) is not applicable, the prices of identical or similar materials provided by an independent third party within PRC territory in accordance with general commercial terms during its daily business operation.

4.3 At any time, both parties agree to adopt any state regulated price effective and applicable to the agreed provision hereof at any time. Such price is required for such agreed provision in accordance to laws, regulations, decrees or pricing policies (as the case may be) made by relevant Chinese government agencies.

5. Representations, warranties and undertakings by Yankuang Group

5.1 Yankuang Group, a wholly state owned enterprise with limited liability and a status of independent legal entity incorporated under the PRC laws, currently holds a valid business license.

5.2 Yankuang Group has been engaging in business activities in accordance with the laws, and never involves in any business exceeding the scope set by laws.

5.3 The entrance or performance of obligations hereof by Yankuang Group neither breaches nor legally conflicts with any other agreements it entered or its articles of corporation.

5.4 Yankuang Group undertakes that the terms of material provision hereof shall be no less favourable than that provided to any independent third parties by itself, its subsidiaries or associated person (as the case may be).

5.5 Yankuang Group undertakes to provide the Company with materials in accordance with the requirements and standards as negotiated and set by the parties from time to time.

5.6 Yankuang Group undertakes to maintain adequate qualified employees and to provide adequate guidance and instruction for them to provide the Company with agreed provision in fulfilling the reasonable requirements by the Company.

5.7 Yankuang Group guarantees the Company a preferential right in receiving any materials provision hereof, and a preferential right to purchase materials provided by Yankuang Group to any third parties, including but not limited to any other third parties related to Yankuang Group, with identical terms.

5.8 Yankuang Group guarantees that any provision of materials by the subsidiaries and/or associated persons of Yankuang Group to the Company shall conform to the clauses of this agreement.

5.9 Yankuang Group guarantees to be liable for any violation of terms hereof in the agreed provision by its subsidiaries and/or associated persons pursuant to this agreement.

5.10 Yankuang Group guarantees that it will prompt its subsidiaries and associated persons to take any necessary action to fulfil the obligations under this agreement.

5.11 Yankuang Group undertakes to take reasonable measures to avoid any losses of the Company arising from negligence during its performance of obligations hereof. In case of any losses arising therefrom, Yankuang Group guarantees to compensate for all losses of the Company.

6. Representations, warranties and undertakings by the Company

6.1 The Company, a limited liability company incorporated under the laws of PRC with the status of an independent legal entity, currently holds a valid business license.

6.2 The Company has been engaging in business activities in accordance with the laws, and never involves in any business exceeding the scope set by laws.

6.3 The entrance or performance of obligations hereof by the Company neither breaches nor legally conflicts with any other agreements it entered or its articles of corporation.

6.4 The Company guarantees to make timely payment to Yankuang Group for the agreed provision in accordance with this agreement.

7. Termination of agreed provision

7.1 In case the Company cannot easily obtain similar materials from a third party in equivalent terms of this Agreement, Yankuang Group shall not terminate the provision of materials hereunder for any reason.

7.2 Subject to clause 7.1, any party may terminate the provision or purchase of certain kind of materials by providing not less than 12 months prior written notice to the other party. The kind of material provision or purchase to be terminated and the effective date of such termination shall be specified in the termination notice. Termination shall be set forth automatically from the effective date specified in notification without affecting other rights and obligations of Yankuang Group or the Company hereunder.

7.3 For the avoidance of doubt, both parties agree that, where the Company has issued termination notice of agreed provision pursuant to clause 7.2, Yankuang Group shall continue its provision of materials to the Company pursuant to applicable provision clauses other than the requirement(s) on term of provision from the date of the notice until the termination effective date. The applicable clauses shall include relevant terms of the Supplementary Agreement entered in accordance with clause 8.3.

8. Effective date, term and termination of agreement

8.1 Unless otherwise agreed in written form by both parties, this Agreement shall apply with retrospective effect from 1 January 2012, subject to signatures by the legal representatives or authorized representatives of both parties and approval by independent shareholders or the board of directors pursuant to approval permission and local regulatory requirements in the listing locations of the Company.

8.2 This agreement is valid for 3 years starting from 1 January 2012 until 31 December 2014. The previous Connected Transactions Agreement shall terminate automatically upon effect of this agreement.

8.3 In case of any need to modify this agreement, both parties shall enter into a supplemental agreement on the relevant issues prior to the end of November in the year prior to the relevant fiscal year specified in such supplemental agreement. In the event of failure of both parties to achieve consent on the terms of the supplemental agreement before the above time limit, the current terms of provision shall be applicable to the next fiscal year until an agreement is reached or the disputes are settled by both parties pursuant to clause 8.4.

8.4 Where the parties fail to reach an agreement in connection with any matters related to the transaction price (including but not limited to the amount and the time of payment), such matters shall, upon the request of any party, be submitted to Zoucheng City Pricing Bureau as a mediator for determining solution. Such decision by Zoucheng City Price Bureau shall be final and binding on both parties.

8.5 Both parties may negotiate and enter into a new provision of materials agreement prior to the termination of this Agreement to ensure normal operation and production of both parties after such termination.

8.6 In case of material default of any clauses hereof by any party (“defaulting party”) , this agreement may be terminated immediately by the other party where the defaulting party fail to provide remediation of such default within the reasonable period requested in written notice by the other party for remediation of such act of default, or where such act of default is not remediable.

8.7 Termination of this Agreement shall not harm any occurred rights or duties of any party.

9. Performance

In accordance with the regulatory requirements of the listing location of the Company (including but not limited to Hong Kong Stock Exchange Listing Rules and Shanghai Stock Exchange Stock Listing Rules), an annual quota of transaction shall be set for continuing connected transactions under this Agreement. Where the annual quota for agreed provision requires the approval by independent shareholders of the Company, the continuity of such transactions shall be subject to the approval of independent shareholders of the Company. Where, in any year, the actual occurring amount of such transactions exceeds the annual quota approved by independent shareholders of the Company, both parties should terminate the agreed provision in excess of the annual quota approved by independent shareholders prior to the approval procedure of the Company in compliance to the regulatory requirements of the listing locations.

10. Announcement

Any party shall not make or permit others to make (where one party is capable to control the other) any announcement related to the subject of this agreement or any relevant issues without prior written consent of the other party, save for announcement made in compliance with requirements by law or the China Securities Regulatory Commission, Shanghai Stock Exchange, the Hong Kong Stock Exchange , the Securities and Futures Commission in Hong Kong, the New York Stock Exchange, the United States Securities and Exchange Commission or regulatory authorities in any other listing locations of the Company.

11. Other requirements

11.1 Neither party shall assign or transfer its rights or obligations of this agreement to any third parties without prior written consent of the other party.

11.2 This Agreement and its Appendix shall constitute a complete agreement by both parties on all issues herein and replace all prior agreements by both parties related to such transactions. In case of violation of any clauses of the previous connected transactions agreement by any party (“defaulting party”), the effect of this agreement shall not affect any rights entitled by the other party (“non-defaulting party”) due to the violation of the defaulting party.

11.3 Should any clauses herein become illegal, invalid or unenforceable at any time, the other clauses shall not be affected.

11.4 In case of any failure or delay of any party in performance of its obligations of this agreement pursuant to the requirements hereof due to force majeure, the party shall provide immediate written notification for the other party and shall not be deemed as default. The other party shall provide a reasonable period for the said party to perform its duties and obligations according to the situation.

11.5 Both parties agree to bear all relevant costs and expenses required by relevant laws of PRC arising from the entrance of this agreement or evenly distribute such costs and expenses where there is no relevant regulation.

11.6 Any amendments of this agreement or its appendix shall be provided in written form where possible and shall be signed by both parties and approved via appropriate legal procedures.

11.7 Unless otherwise required, failure or delay in exercising its rights, powers or privileges hereunder by any party shall not constitute a waiver of such rights, powers or privileges, and a single or partial exercise of such right, power or privilege does not exclude its exercise of any other rights, powers or privileges.

11.8 The Appendix is an integral part of this Agreement, and shall be equally binding upon both parties as the Agreement itself.

12. Notice

12.1 In accordance with this Agreement, any notices or other documents shall be made in written form and delivered by hand, by mail or by fax to the relevant parties to the following addresses:

(a)	Yankuang Group:	Yankuang Group Company Limited
	Address:	298 Fushannan Road, Zoucheng City, Shandong Province P.R. of China
	Tel:	0537-5382232
	Fax:	0537-5382831
(b)	The Company:	Yanzhou Coal Mining Company Limited
	Address:	298 Fushannan Road, Zoucheng City, Shandong Province P.R. of China
	Tel:	0537-5383916
	Fax:	0537-5382032

12.2 Arrival time of notices or documents:

(a) Delivery by hand: upon hand-over of the letter;

(b) Delivery by mail: within five (5) working days after posting (excluding Saturdays, Sundays and public holidays in PRC); and

(c) Delivery by fax: upon receipt of fax. Where the fax is received outside business hours, the receiving time shall be the general business hours of the second day (excluding Saturdays, Sundays and public holidays in PRC) and the sender shall present the confirmation from the fax machine to certify completion of faxing.

13. Applicable laws and jurisdictions

This agreement shall be governed by and construed by the applicable laws of PRC. Any disputes (including any issues concerning the existence, validity, and rights and duties of both parties under this Agreement) arising from or in connection with this Agreement unable to be resolved through friendly negotiation may be submitted to Jining Arbitration Commission located in Jining city for arbitration according to its prevailing Provision Rules of Procedure upon request of any party. This arbitrate award shall be final and binding upon both parties.

14. Others

This agreement is provided in Chinese.

Copies of this agreement, which are made in quadruplicate with equal legal effects, shall be held respectively by both parties (2 copies for each party) upon signature and sealing by the legal or authorized representatives of both parties.

Appendix: Provision of materials by Yankuang Group to the Company

Item no.	Item	Pricing basis	Provision period	Notice period for termination
1	Materials and equipment for production, including but not limited to mining equipment and machineries such as cement, conveyor belts and power cable for mining and other similar materials and coal	Market price	3 years	12 months

In witness hereof, this agreement has been signed on the date specified on the first page.

Yankuang Group Company Limited (Seal)

Legal representative

/authorized representative: /s/ Li Weimin

Yanzhou Coal Mining Company Limited (Seal)

Legal representative

/authorized representative: /s/ Wang Xin

EX-4.3

EXHIBIT 4.3

Code : 02

Provision of Labor and Services Agreement

between

Yankuang Group Company Limited

and

Yanzhou Coal Mining Company Limited

23 April 2012

This agreement is made and come into force of this day of 23 April 2012 in Zoucheng City, Shangdong Province, between:

Yankuang Group Company Limited, a wholly state-owned enterprise incorporated and validly exists under the laws of PRC with registry number of business license for legal person as 370000018019807 and registered office at 298 Fushannan Road Zoucheng, Shandong Province and its legal representative being Wang Xin (hereinafter referred to as “Yankuang Group”).

Yanzhou Coal Mining Company Limited, a company with limited liability incorporated and validly exists under the laws of PRC listing in the Shanghai Stock Exchange, Hong Kong Stock Exchange and New York Stock Exchange, with registry number of business license for legal person as 370000400001016 and registered office at 298 Fushannan Road Zoucheng, Shandong Province and its legal representative being Li Weimin (hereinafter referred to as “the Company”).

Where:

1. On 25 September 1997, Yankuang Group, as the only promoter, founded the Company pursuant to PRC laws. As part of its reorganization, Yankuang Group injected assets and liabilities relating to its major coal production business into the Company, and Yankuang Group retained the remaining assets and liabilities.

2. After successive IPO and listing of the Company in the Shanghai Stock Exchange, Hong Kong Stock Exchange and New York Stock Exchange, Yankuang Group remains the controlling stockholder of the Company, holding 52.86% of stocks in the Company as at the date hereof.

3. Yankuang Group owns coal production business relevant affiliated facilities, services and education systems, which can provide various services to the Company, which, as a company mainly operating in coal production business, is incapable of undertaking direct social and welfare responsibilities.

4. On 31 October 2008, Yankuang Group and the Company entered into Provision of Labor and Services Agreement, which were ratified by independent shareholders on 23 December 2008. This agreement was effective for 3 years from 1 January 2009 to 31 December 2011. Pursuant to the original Provision of Labor and Services Agreement, Yankuang Group provided the Company with the following services : (1) environmental services; (2) security and fire services; (3) militia training; (4) gas and heat supply; (5) property management; (6) children education; (7) technical staff training; (8) IT and communication services; (9) maintenance of machineries and equipment; (10) construction work; (11) vehicles and transportation; (12) employee benefits; (13) retirement benefits.

5. According to the latest development, Yankuang Group shall continue its provision of labor and services with certain items adjusted.

Pursuant to Contract Law of the People’s Republic of China, relevant laws and regulations, and local regulatory requirements in the listing locations of the Company, Yankuang Group and the Company, through friendly discussion, agree on continued provision of labor and services as follow:

1. Definition and explanations

1.1 Definition

Terms herein have the following meaning unless otherwise required by the context:

“Fiscal year”	refers to	each year from 1 January to 31 December;
“Half year”	refers to	1 January to 30 June or from 1 July to 31 December for each fiscal year;
“Hong Kong Stock Exchange”	refers to	the Stock Exchange of Hong Kong Limited;
“PRC”	refers to	People’s Republic of China;
“RMB”	refers to	Renminbi, the legal currency of PRC;
“Previous Connected Transaction Agreement”	refers to	the Provision of Labor and Services Agreement entered between Yankuang Group and the Company on 31 October 2008;
“Market price”	refers to	the market price of labor and services provided hereunder calculated pursuant to clause 4.2 of the agreement in applicable circumstances;
“Cost price”	refers to	Costs incurs from Yankuang Group in providing the Company with the labor and services in accordance with the agreement or the payment of Yankuang Group in purchasing the labor and services from a third party and additional costs from the transfer of the labor and services from Yankuang Group to the Company;
“State regulated price”	refers to	price of labor and services provided hereunder set in accordance with clause 4.4; and
“Subsidiaries”	refers to	the holding subsidiaries and other affiliates of Yankuang Group and the Company.

1.2 Explanation

Unless the contrary intention appears,

(1) Where the provision of labor and services is involved herein, both Yankuang Group and the Company shall refer to itself as well as its subsidiaries. Yankuang Group also includes its associated persons from time to time (“associated persons” has the meaning ascribed to it in the Rules Governing the Listing of Securities of the Stock Exchange of Hong Kong Limited). In this agreement, the subsidiaries of Yankuang Group exclude the Company and its subsidiaries;

(2) Any party in the agreement and any other agreements includes its successors or approved assignees (if any);

(3) Clauses and appendixes refer to clauses and appendixes hereof;

(4) Any clauses herein shall not be interpreted as the prohibition to postponing, revision, modification or supplement of the agreement;

(5) The title of the agreement is intended for convenience purpose only and shall not affect the content and explanation hereof.

2. Provision of labor and services

2.1 Labor and services provided by Yankuang Group with the Company in accordance with the agreement includes:

(1) Heat supply;

(2) Property management (management of dormitories or properties rented or owned by employees of the Company);

(3) IT and communication services (telephone, internet, IT system and related services);

(4) Maintenance of machineries and equipment (maintenance of mining equipment and machineries such as mining machine, development machine, hydraulic crops, belt conveyors etc. and repair works services;

(5) Construction work and management;

(6) Vehicle and transportation (coal, short distance transportation of purchased materials and coal mine waste transportation service);

(7) Employee benefits (include but not limited to children nursing, medical benefits for close family members, household heat supply, cultural, art, sport and entertainment services, financial assistance, travel allowance and other welfare expenditures in accordance with national regulations); and

(8) Retirement benefits (pension, relief benefit, mature age allowance, medical benefits, housing allowance and other welfare expenditures in accordance with national regulations).

Yankuang Group shall provide labor and services hereunder pursuant to the terms hereof and specific terms (including but not limited to quantity and quality) in written agreements entered between both parties from time to time.

2.2 Yankuang Group undertakes that, under any circumstances, the prices of labor and services provided to the Company by Yankuang Group shall not exceed the prices received by Yankuang Group from any independent third parties for the same kind of labor and services. Under proper circumstance, Yankuang Group may provide discount to the Company. The Company is not restricted to purchase labor and services from Yankuang Group only.

3. Execution

3.1 The Company shall submit the labor and services demand plan for the coming year or service adjustment plan for the current year (“annual provision plan”) to Yankuang Group prior to 31 November each year. The parties shall agree on the plan before 31 December of the year. Where the labor and services demand plan of the Company for the coming year is identical to the current year, Yankuang Group shall perform such plan.

3.2 The parties and their subsidiaries and associated person of Yankuang Group shall enter into specific labor and services provision contracts in accordance with this agreement (including annual provision plan developed under this agreement).

3.3 Annual provision plans or specific provision contracts can be adjusted during the course of execution upon agreement by both parties where necessary.

3.4 Payments for provision of labor and services can be made in one time or by installments.

3.5 Both parties shall enter the items of account payable or account receivable of continuing connected transaction into the account book before the last business day of each calendar month. All the payments of continuing connected transaction of each calendar month other than the outstanding transaction or disputed ones shall be settled in the next month.

4. Pricing basis of provision of labor and services

4.1 Prices of provision of construction work and management services, IT and communication services, maintenance of machineries and equipment and vehicle and transportation services shall be determined by market price, which should be calculated and estimated before the beginning of the fiscal year where possible.

4.2 Prices of provision of construction work and management services, IT and communication services, maintenance of machineries and equipment and vehicle and transportation services shall be determined by market price and general commercial terms as below:

(1) The prices of identical or similar services provided by an independent third party in the area of provision or in the vicinity in accordance with general commercial terms during its daily business operation; or

(2) Where item (1) is not applicable, the prices of identical or similar service provided by an independent third party within PRC territory in accordance with general commercial terms during its daily business operation.

4.3 Both parties agreed that the prices of services such as heat supply, property management, employee benefits and retirement benefits shall be determined based on their cost prices. Yankuang Group shall provide the Company with complete relevant account books and records for calculation of such cost prices.

4.3.1 The final price for heat supply shall equal to the product of total cost at which Yankuang Group provide to the Company and itself with such services times the ratio of the area of the Company’s premises covered by such services to the aggregate area of premises of Yankuang Group and the Company covered by such services.

4.3.2 The final price for property management shall equal to the product of total cost at which Yankuang Group provide to the Company and itself with such services times the ratio of the number of staff of the Company covered by such services to the aggregate number of staff of Yankuang Group and the Company covered by such services.

4.3.3 Employee benefit shall be the actual cost incurred by Yankuang Group in providing the services.

4.3.4 The amount of retirement benefits paid shall be calculated and estimated as 15% of the prevailing total wage of the employee. The calculation and estimation is based on the actual incurred amount of Yankuang Group in providing services in the past combined with future changes. Notwithstanding the above, the annual payment amount for each year from 2012 to 2014 shall not exceed RMB655,500,000, RMB753,825,000 and RMB866,906,000 respectively. The amount exceeding the above annual quota shall be borne by Yankuang Group.

4.4 At any time, both parties agree to adopt any state regulated price effective and applicable to the provision of labor and services hereof at any time. Such price is required for such provision of labor and services in accordance to laws, regulations, decrees or pricing policies (as the case may be) made by relevant Chinese government agencies.

5. Representations, warranties and undertakings by Yankuang Group

5.1 Yankuang Group, a wholly state owned enterprise with limited liability and a status of independent legal entity incorporated under the PRC laws, currently holds a valid business license.

5.2 Yankuang Group has been engaging in business activities in accordance with the laws, and never involves in any business exceeding the scope set by laws.

5.3 The entrance or performance of obligations hereof by Yankuang Group neither breaches nor legally conflicts with any other agreements it entered or its articles of corporation.

5.4 Yankuang Group undertakes that the terms of labor and services provision hereof shall be no less favorable than that provided to any independent third parties by itself, its subsidiaries or associated person (as the case may be).

5.5 Yankuang Group undertakes to provide the Company with labor and services in accordance with the requirements and standards as negotiated and set by the parties from time to time.

5.6 Yankuang Group undertakes to maintain adequate qualified employees and to provide adequate guidance and instruction for them to provide the Company with provision of labor and services in fulfilling the reasonable requirements by the Company.

5.7 Yankuang Group guarantees the Company a preferential right in receiving any labor and services provision hereof, and a preferential right to purchase labor and services provided by Yankuang Group to any third parties, including but not limited to any other third parties related to Yankuang Group, with identical terms.

5.8 Yankuang Group guarantees that any provision of labor and services by the subsidiaries and/or associated persons of Yankuang Group to the Company shall conform to the clauses of this agreement.

5.9 Yankuang Group guarantees to be liable for any violation of terms hereof in the provision of labor and services by its subsidiaries and/or associated persons pursuant to this agreement.

5.10 Yankuang Group guarantees that it will prompt its subsidiaries and associated persons to take any necessary action to fulfil the obligations under this agreement.

5.11 Yankuang Group undertakes to take reasonable measures to avoid any losses of the Company arising from negligence during its performance of obligations hereof. In case of any losses arising therefrom, Yankuang Group guarantees to compensate for all losses of the Company.

6. Representations, warranties and undertakings by the Company

6.1 The Company, a limited liability company incorporated under the laws of PRC with the status of an independent legal entity, currently holds a valid business license.

6.2 The Company has been engaging in business activities in accordance with the laws, and never involves in any business exceeding the scope set by laws.

6.3 The entrance or performance of obligations hereof by the Company neither breaches nor legally conflicts with any other agreements it entered or its articles of corporation.

6.4 The Company guarantees to make timely payment to Yankuang Group for the provision of labor and services in accordance with this agreement.

7. Termination of provision of labor and services

7.1 In case the Company cannot easily obtain similar labor and services from a third party in equivalent terms of this Agreement, Yankuang Group shall not terminate the provision of labor and services hereunder for any reason.

7.2 Subject to clause 7.1, any party may terminate the provision or purchase of certain kind of labor and services by providing not less than 12 months prior written notice to the other party. The kind of material provision or purchase to be terminated and the effective date of such termination shall be specified in the termination notice. Termination shall be set forth automatically from the effective date specified in notification without affecting other rights and obligations of Yankuang Group and Company hereunder.

7.3 For the avoidance of doubt, both parties agree that, where the Company has issued termination notice of provision of labor and services pursuant to clause 7.2, Yankuang Group shall continue its provision of labor and services to the Company pursuant to applicable provision clauses other than the requirement(s) on term of provision from the date of the notice until the termination effective date. The applicable clauses shall include relevant terms of the Supplementary Agreement entered in accordance with clause 8.3.

8. Effective date, term and termination of agreement

8.1 Unless otherwise agreed in written form by both parties, this Agreement shall apply with retrospective effect from 1 January 2012, subject to signatures by the legal representatives or authorized representatives of both parties and approval by independent shareholders or the board of directors pursuant to approval permission and local regulatory requirements in the listing locations of the Company.

8.2 This agreement is valid for 3 years starting from 1 January 2012 until 31 December 2014. The previous Connected Transactions Agreement shall terminate automatically upon effect of this agreement.

8.3 In case of any need to modify this agreement, both parties shall enter into a supplemental agreement on the relevant issues prior to the end of November in the year prior to the relevant fiscal year specified in such supplemental agreement. In the event of failure of both parties to achieve consent on the terms of the supplemental agreement before the above time limit, the current terms of provision shall be applicable to the next fiscal year until an agreement is reached or the disputes are settled by both parties pursuant to clause 8.4.

8.4 Where the parties fail to reach an agreement in connection with any matters related to the transaction price (including but not limited to the amount and the time of payment), such matters shall, upon the request of any party, be submitted to Zoucheng City Pricing Bureau as a mediator for determining solution. Such decision by Zoucheng City Price Bureau shall be final and binding on both parties.

8.5 Both parties may negotiate and enter into a new provision of labor and services agreement prior to the termination of this Agreement to ensure normal operation and production of both parties after such termination.

8.6 In case of material default of any clauses hereof by any party (“defaulting party”) , this agreement may be terminated immediately by the other party where the defaulting party fail to provide remediation of such default within the reasonable period requested in written notice by the other party for remediation of such act of default, or where such act of default is not remediable.

8.7 Termination of this Agreement shall not harm any occurred rights or duties of any party.

9. Performance

In accordance with the regulatory requirements of the listing location of the Company (including but not limited to Hong Kong Stock Exchange Listing Rules and Shanghai Stock Exchange Stock Listing Rules), an annual quota of transaction shall be set for continuing connected transactions under this Agreement. Where the annual quota for provision of labor and services is requires the approval by independent shareholders of the Company, the continuity of such transactions shall be subject to the approval of independent shareholders of the Company. Where, in any year, the actual occurring amount of such transactions exceeds the annual quota approved by independent shareholders of the Company, both parties should terminate the provision of labor and services in excess of the annual quota approved by independent shareholders prior to the approval procedure of the Company in compliance to the regulatory requirements of the listing locations.

10. Announcement

Any party shall not make or permit others to make (where one party is capable to control the other) any announcement related to the subject of this agreement or any relevant issues without prior written consent of the other party, save for announcement made in compliance with requirements by law or the China Securities Regulatory Commission, Shanghai Stock Exchange, the Hong Kong Stock Exchange , the Securities and Futures Commission in Hong Kong, the New York Stock Exchange, the United States Securities and Exchange Commission or regulatory authorities in any other listing locations of the Company.

11. Other requirements

11.1 Neither party shall assign or transfer its rights or obligations of this agreement to any third parties without prior written consent of the other party.

11.2 This Agreement and its Appendix shall constitute a complete agreement by both parties on all issues herein and replace all prior agreements by both parties related to such transactions. In case of violation of any clauses of the previous connected transactions agreement by any party (“defaulting party”), the effect of this agreement shall not affect any rights entitled by the other party (“non-defaulting party”) due to the violation of the defaulting party.

11.3 Should any clauses herein become illegal, invalid or unenforceable at any time, the other clauses shall not be affected.

11.4 In case of any failure or delay of any party in performance of its obligations of this agreement pursuant to the requirements hereof due to force majeure, the party shall provide immediate written notification for the other party and shall not be deemed as default. The other party shall provide a reasonable period for the said party to perform its duties and obligations according to the situation.

11.5 Both parties agree to bear all relevant costs and expenses required by relevant laws of PRC arising from the entrance of this agreement or evenly distribute such costs and expenses where there is no relevant regulation.

11.6 Any amendments of this agreement or its appendix shall be provided in written form where possible and shall be signed by both parties and approved via appropriate legal procedures.

11.7 Unless otherwise required, failure or delay in exercising its rights, powers or privileges hereunder by any party shall not constitute a waiver of such rights, powers or privileges, and a single or partial exercise of such right, power or privilege does not exclude its exercise of any other rights, powers or privileges.

11.8 The Appendix is an integral part of this Agreement, and shall be equally binding upon both parties as the Agreement itself.

12. Notice

12.1 In accordance with this Agreement, any notices or other documents shall be made in written form and delivered by hand, by mail or by fax to the relevant parties to the following addresses:

(a)	Yankuang Group:	Yankuang Group Company Limited
	Address:	298 Fushannan Road, Zoucheng City, Shandong Province P.R. of China
	Tel:	0537-5382232
	Fax:	0537-5382831
(b)	The Company:	Yanzhou Coal Mining Company Limited
	Address:	298 Fushannan Road, Zoucheng City, Shandong Province P.R. of China
	Tel:	0537-5383196
	Fax:	0537-5382032

12.2 Arrival time of notices or documents:

(a) Delivery by hand: upon hand-over of the letter;

(b) Delivery by mail: within five (5) working days after posting (excluding Saturdays, Sundays and public holidays in PRC); and

(c) Delivery by fax: upon receipt of fax. Where the fax is received outside business hours, the receiving time shall be the general business hours of the second day (excluding Saturdays, Sundays and public holidays in PRC) and the sender shall present the confirmation from the fax machine to certify completion of faxing.

13. Applicable laws and jurisfiction

This agreement shall be governed by and construed by the applicable laws of PRC. Any disputes (including any issues concerning the existence, validity, and rights and duties of both parties under this Agreement) arising from or in connection with this Agreement unable to be resolved through friendly negotiation may be submitted to Jining Arbitration Commission located in Jining city for arbitration according to its prevailing Provision Rules of Procedure upon request of any party. This arbitrate award shall be final and binding upon both parties.

14. Others

This agreement is provided in Chinese.

Copies of this agreement, which are made in quadruplicate with equal legal effects, shall be held respectively by both parties (2 copies for each party) upon signature and sealing by the legal or authorized representatives of both parties.

Appendix: Provision of labor and services by Yankuang Group to the Company

Item no.	Item	Pricing basis	Provision period	Notice period for termination
1	Heat supply	The price shall be determined based on cost price. The final price shall equal to the product of total cost at which Yankuang Group provide to the Company and itself with such services times the ratio of the area of the Company premises covered with such services to the aggregate area of premises of Yankuang Group and the Company covered with such services.	3 years	12 months
2	Property management	The price shall be determined based on cost price. The final price shall equal to the product of total cost at which Yankuang Group provide to the Company and itself with such services times the ratio of the number of staff of the Company covered with such services to the aggregate number of staff of Yankuang Group and the Company covered with such services.	3 years	12 months
3	IT and communication services	Market price	3 years	12 months
4	Maintenance of machineries and equipment		3 years	12 months
5	Construction work and management		3 years	12 months
6	Vehicles and transportation		3 years	12 months
7	Employee benefits	The actual cost incurred by Yankuang Group in providing the services.	3 years	12 months
8	Retirement benefits	The amount of retirement benefits paid shall be calculated and estimated as 15% of the prevailing total wage of the employee. The calculation and estimation is based on the actual incurred amount of Yankuang Group in providing services in the past combined with future changes. Notwithstanding the above, the annual payment amount for each year from 2012 to 2014 shall not exceed RMB655,500,000, RMB 753,825,000 and RMB 866,903,000 respectively. The amount exceeding the above annual quota shall be borne by Yankuang Group.	3 years	12 months

In witness hereof, this agreement has been signed on the date specified on the first page.

Yankuang Group Company Limited (Seal)

Legal representative

/authorized representative: /s/ Li Weimin

Yanzhou Coal Mining Company Limited (Seal)

Legal representative

/authorized representative: /s/ Wang Xin

EX-4.4

EXHIBIT 4.4

Code : 03

Provision of Administrative Services for Pension Fund Agreement

between

Yankuang Group Company Limited

and

Yanzhou Coal Mining Company Limited

23 April 2012

This agreement is made and come into force of this day of 23 April 2012 in Zoucheng City, Shangdong Province, between

Yankuang Group Company Limited, a wholly state-owned enterprise incorporated and validly exists under the laws of PRC with registry number of business license for legal person as 370000018019807 and registered office at 298 Fushannan Road Zoucheng, Shandong Province and its legal representative being Wang Xin (hereinafter referred to as “Yankuang Group”).

Yanzhou Coal Mining Company Limited, a company with limited liability incorporated and validly exists under the laws of PRC listing in the Shanghai Stock Exchange, Hong Kong Stock Exchange and New York Stock Exchange, with registry number of business license for legal person as 370000400001016 and registered office at 298 Fushannan Road Zoucheng, Shandong Province and its legal representative being Li Weimin (hereinafter referred to as “the Company”).

Where:

1. On September 25 1997, Yankuang Group, as the only promoter, founded the Company pursuant to PRC laws. As part of its reorganization, Yankuang Group injected assets and liabilities relating to its major coal production business into the Company, and Yankuang Group retained the remaining assets and liabilities.

2. After successive IPO and listing of the Company in the Shanghai Stock Exchange, Hong Kong Stock Exchange and New York Stock Exchange, Yankuang Group remains the controlling stockholder of the Company, holding 52.86% of stocks in the Company as at the date hereof.

3. Yankuang Group owns coal production business relevant affiliated facilities, services and education systems, which can provide various services to the Company, which, as a company mainly operating in coal production business, is incapable of undertaking direct social and welfare responsibilities.

4. On 31 October 2008, Yankuang Group and the Company entered into Provision of Administrative Services for Pension Fund Agreement, which were ratified by independent shareholders on 23 December 2008. This agreement was effective for 3 years from 1 January 2009 to 31 December 2011. Pursuant to the original Provision of Administrative Services for Pension Fund Agreement, Yankuang Group administrates and transfers Pension Fund on behalf of the Company.

Pursuant to Contract Law of the People’s Republic of China, relevant laws and regulations, and local regulatory requirements in the listing locations of the Company, Yankuang Group and the Company, through friendly discussion, agreed on provision of administrative services for basic pension fund, basic medical pension fund, unemployment pension fund and maternity pension fund (hereinafter referred to as “pension fund”) free of charge as below:

1. Definition and explanations

1.1 Definition

Terms herein have the following meaning unless otherwise required by the context:

“Hong Kong Stock Exchange”	refers to	the Stock Exchange of Hong Kong Limited;
“PRC”	refers to	People’s Republic of China;
“Previous Connected Transaction Agreement”	refers to	the Provision of Administrative Services for Pension Fund Agreement entered between Yankuang Group and the Company on 31 October 2008;
“Subsidiaries”	refers to	the holding subsidiaries and other affiliates of Yankuang Group and the Company;
“Administrate pension fund” or “pension fund administration”	Refers to	The free administrative services provided for basic pension fund, basic medical pension fund, unemployment pension fund and maternity pension fund of retired or current employees and transfer of the entire premium to social pension fund institutes by Yankuang Group pursuant to this agreement.

1.2 Explanation

Unless the contrary intention appears,

(1) Where the provision of administrative services for pension fund is involved herein, both Yankuang Group and the Company shall refer to itself as well as its subsidiaries. Yankuang Group also includes its associated persons from time to time (“associated persons” has the meaning ascribed to it in the Rules Governing the Listing of Securities of the Stock Exchange of Hong Kong Limited). In this agreement, the subsidiaries of Yankuang Group exclude the Company and its subsidiaries;

(2) Any party in the agreement and any other agreements includes its successors or approved assignees (if any);

(3) Clauses and appendixes refer to clauses and appendixes hereof;

(4) Any clauses herein shall not be interpreted as the prohibition to postponing, revision, modification or supplement of the agreement;

(5) The title of the agreement is intended for convenience purpose only and shall not affect the content and explanation hereof.

2. Pension fund administration and payment standard

2.1 Pursuant to the requirements of laws and regulations, employees of the Company shall join the pension fund plan and the Company shall pay pension fund premium for its employees.

2.2 The parties agree that Yankuang Group shall provide the Company with administrative services and transferring services for pension fund free of charge pursuant to relevant laws, rules, regulations and other regulative documents.

2.2.1 The Company amortizes 20%, 10%, 2% and 1% of the employee’s total monthly salary as the basic pension fund, medical pension fund, unemployment pension fund and maternity pension fund respectively, and transfers the money to special account (“pension fund special account”) set up by Yankuang Group for the Company before the end of each month. Yankuang Group, pursuant to relevant laws and regulations, shall submit such premium for the Company’s employees.

2.2.2 The amount of basic pension fund, medical pension fund, unemployment pension fund and maternity pension fund shall be adjusted from time to time in accordance with relevant laws and regulations.

2.2.3 Yankuang Group shall provide special management on the pension fund special account; and the amount therein shall only be used for the administration of pension fund of the Company’s employees.

2.2.4 Yankuang Group shall provide the Company with annual description of the usage of fund in the special pension fund account.

2.2.5 The Company shall have the power to supervise and inspect the use of the pension fund special account.

2.2.6 Yankuang Group shall administrate pension fund for the Company pursuant to the terms hereof and specific terms in the written agreement entered by the two parties from time to time.

3. Representations, warranties and undertakings by Yankuang Group

3.1 Yankuang Group, a wholly state owned enterprise with limited liability and a status of independent legal entity incorporated under the PRC laws, currently holds a valid business license.

3.2 Yankuang Group has been engaging in business activities in accordance with the laws, and has not been involved in any business exceeding the scope set by laws.

3.3 Yankuang Group shall assist the Company in performing its liability and obligations, or perform such liability and obligations on behalf of the Company according to its instruction, in transferring the pension fund premium pursuant to relevant laws, rules, regulations and other regulatory documents,.

3.4 The entrance or performance of obligations hereof by Yankuang Group neither breaches nor legally conflicts with any other agreements it entered or its articles of corporation.

3.5 Yankuang Group undertakes to provide the Company with services in accordance with the requirements and standards as negotiated and set by the parties from time to time.

3.6 Yankuang Group guarantees to treat information including number of staff and employee salary form provided by the Company in strict confidential, and to restrict the use of these information only for fulfilling the terms of this agreement.

3.7 Yankuang Group undertakes to maintain adequate qualified employees and to provide adequate guidance and instruction for them to provide the Company with services hereunder in fulfilling the reasonable requirements by the Company.

3.8 Yankuang Group guarantees that any provision of services by the subsidiaries and/or associated persons of Yankuang Group to the Company shall conform to the clauses of this agreement.

3.9 Yankuang Group guarantees to be liable for any violation of terms hereof in the provision of services by its subsidiaries and/or associated persons pursuant to this agreement.

3.10 Yankuang Group guarantees that it will prompt its subsidiaries and associated persons to take any necessary action to fulfill the obligations under this agreement.

3.11 Yankuang Group undertakes to take reasonable measures to avoid any losses of the Company arising from negligence during its performance of obligations hereof. In case of any losses arising therefrom, Yankuang Group guarantees to compensate for all losses of the Company.

4. Representations, warranties and undertakings by the Company

4.1 The Company, a limited liability company incorporated under the laws of PRC with the status of an independent legal entity, currently holds a valid business license.

4.2 The Company has been engaging in business activities in accordance with the laws, and never involves in any business exceeding the scope set by laws.

4.3 The entrance or performance of obligations hereof by the Company neither breaches nor legally conflicts with any other agreements it entered or its articles of corporation.

4.4 The Company guarantees to fully credit relevant amount to the special pension fund account in time in accordance with this agreement.

4.5 The Company shall truthfully provide Yankuang Group with information including number of staff, employee salary form and relevant information required for performing obligations under this agreement.

5. Termination of administrative service under this agreement

5.1 In case the Company cannot easily obtain similar administrative services for pension fund from a third party in equivalent terms of this Agreement, Yankuang Group shall not terminate the provision of services hereunder for any reason.

5.2 Subject to clause 5.1, any party may terminate the provision or purchase of certain kind of services by providing not less than 12 months prior written notice to the other party. The kind of services provision or purchase to be terminated and the effective date of such termination shall be specified in the termination notice. Termination shall be set forth automatically from the effective date specified in notification without affecting other rights and obligations of Yankuang Group and Company hereunder.

5.3 For the avoidance of doubt, both parties agree that, where the Company has issued termination notice of services provision pursuant to clause 5.2, Yankuang Group shall continue its provision of services to the Company pursuant to applicable provision clauses other than the requirement(s) on term of provision from the date of the notice until the termination effective date. The applicable clauses shall include relevant terms of the Supplementary Agreement entered in accordance with clause 6.3.

6. Effective date, term and termination of agreement

6.1 Unless otherwise agreed in written form by both parties, this Agreement shall apply with retrospective effect from 1 January 2012, subject to signatures by the legal representatives or authorized representatives of both parties and approval by independent shareholders or the board of directors pursuant to approval permission and local regulatory requirements in the listing locations of the Company.

6.2 This agreement is valid for 3 years starting from 1 January 2012 until 31 December 2014. The previous Connected Transactions Agreement shall terminate automatically upon effect of this agreement.

6.3 In case of any need to modify this agreement, both parties shall enter into a supplemental agreement on the relevant issues prior to the end of November in the year prior to the relevant fiscal year specified in such supplemental agreement. In the event of failure of both parties to achieve consent on the terms of the supplemental agreement before the above time limit, the current terms of provision shall be applicable to the next fiscal year until an agreement is reached.

6.4 Both parties may negotiate and enter into a new provision of administrative services for pension fund agreement prior to the termination of this Agreement to ensure normal operation of employee pension fund administration after such termination.

6.5 In case of material default of any clauses hereof by any party (“defaulting party”) , this agreement may be terminated immediately by the other party where the defaulting party fail to provide remediation of such default within the reasonable period requested in written notice by the other party for remediation of such act of default, or where such act of default is not remediable.

6.6 Termination of this Agreement shall not harm any occurred rights or duties of any party.

7. Performance

In accordance with the regulatory requirements of the listing location of the Company (including but not limited to Hong Kong Stock Exchange Listing Rules and Shanghai Stock Exchange Stock Listing Rules), an annual quota of transaction shall be set for continuing connected transactions under this Agreement. Where the annual quota for provision of administrative services is requires the approval by independent shareholders of the Company, the continuity of such transactions shall be subject to the approval of independent shareholders of the Company. Where, in any year, the actual occurring amount of such transactions exceeds the annual quota approved by independent shareholders of the Company, both parties should terminate the service provision in excess of the annual quota approved by independent shareholders prior to the approval procedure of the Company in compliance to the regulatory requirements of the listing locations.

8. Announcement

Any party shall not make or permit others to make (where one party is capable to control the other) any announcement related to the subject of this agreement or any relevant issues without prior written consent of the other party, save for announcement made in compliance with requirements by law or the China Securities Regulatory Commission, Shanghai Stock Exchange, the Hong Kong Stock Exchange , the Securities and Futures Commission in Hong Kong, the New York Stock Exchange, the United States Securities and Exchange Commission or regulatory authorities in any other listing locations of the Company.

9. Other requirements

9.1 Neither party shall assign or transfer its rights or obligations of this agreement to any third parties without prior written consent of the other party.

9.2 This Agreement and its Appendix shall constitute a complete agreement by both parties on all issues herein and replace all prior agreements by both parties related to such transactions. In case of violation of any clauses of the previous connected transactions agreement by any party (“defaulting party”), the effect of this agreement shall not affect any rights entitled by the other party (“non-defaulting party”) due to the violation of the defaulting party.

9.3 Should any clauses herein become illegal, invalid or unenforceable at any time, the other clauses shall not be affected.

9.4 In case of any failure or delay of any party in performance of its obligations of this agreement pursuant to the requirements hereof due to force majeure, the party shall provide immediate written notification for the other party and shall not be deemed as default. The other party shall provide a reasonable period for the said party to perform its duties and obligations according to the situation.

9.5 Both parties agree to bear all relevant costs and expenses required by relevant laws of PRC arising from the entrance of this agreement or evenly distribute such costs and expenses where there is no relevant regulation.

9.6 Any amendments of this agreement or its appendix shall be provided in written form where possible and shall be signed by both parties and approved via appropriate legal procedures.

9.7 Unless otherwise required, failure or delay in exercising its rights, powers or privileges hereunder by any party shall not constitute a waiver of such rights, powers or privileges, and a single or partial exercise of such right, power or privilege does not exclude its exercise of any other rights, powers or privileges.

9.8 The Appendix is an integral part of this Agreement, and shall be equally binding upon both parties as the Agreement itself.

10. Notice

10.1 In accordance with this Agreement, any notices or other documents shall be made in written form and delivered by hand, by mail or by fax to the relevant parties to the following addresses:

(a)	Yankuang Group:	Yankuang Group Company Limited
	Address:	298 Fushannan Road, Zoucheng City, Shandong Province P.R. of China
	Tel:	0537-5382232
	Fax:	0537-5382831

The Company:	Yanzhou Coal Mining Company Limited
Address:	298 Fushannan Road, Zoucheng City, Shandong Province P.R. of China
Tel:	0537-5383196
Fax:	0537-5382032

10.2 Arrival time of notices or documents:

(a) Delivery by hand: upon hand-over of the letter;

(b) Delivery by mail: within five (5) working days after posting (excluding Saturdays, Sundays and public holidays in PRC); and

(c) Delivery by fax: upon receipt of fax. Where the fax is received outside business hours, the receiving time shall be the general business hours of the second day (excluding Saturdays, Sundays and public holidays in PRC) and the sender shall present the confirmation from the fax machine to certify completion of faxing.

11. Applicable laws and jurisdictions

This agreement shall be governed by and construed by the applicable laws of PRC. Any disputes (including any issues concerning the existence, validity, and rights and duties of both parties under this Agreement) arising from or in connection with this Agreement unable to be resolved through friendly negotiation may be submitted to Jining Arbitration Commission located in Jining city for arbitration according to its prevailing Provision Rules of Procedure upon request of any party. This arbitrate award shall be final and binding upon both parties.

12. Others

This agreement is provided in Chinese.

Copies of this agreement, which are made in quadruplicate with equal legal effects, shall be held respectively by both parties (2 copies for each party) upon signature and sealing by the legal or authorized representatives of both parties.

Appendix: Provision of pension fund administrative service by Yankuang Group to the Company

Item no.	Item	Pricing basis	Provision period	Notice period for termination
1	Basic pension fund	The Company shall pay a monthly amount equivalent to 20% of the total compensation of the employees to a designated account with free administration and transfer service provided by Yankuang Group.	3 years	12 months
2	Medical pension fund	The Company shall pay a monthly amount equivalent to 10% of the total compensation of the employees to a designated account with free administration and transfer service provided by Yankuang Group.	3 years	12 months
3	Unemployment pension fund	The Company shall pay a monthly amount equivalent to 2% of the total compensation of the employees to a designated account with free administration and transfer service provided by Yankuang Group.	3 years	12 months
4	Maternity pension fund	The Company shall pay a monthly amount equivalent to 1% of the total compensation of the employees to a designated account with free administration and transfer service provided by Yankuang Group.	3 years	12 months

In witness hereof, this agreement has been signed on the date specified on the first page.

Yankuang Group Company Limited (Seal)

Legal representative

/authorized representative:  /s/ Li Weimin            

Yanzhou Coal Mining Company Limited (Seal)

Legal representative

/authorized representative:  /s/ Wang Xin            

EX-4.5

EXHIBIT 4.5

Code : 04

Provision of Products and Materials and Equipment Lease Agreement

between

Yanzhou Coal Mining Company Limited

and

Yankuang Group Company Limited

23 April 2012

This agreement is made and come into force of this day of 23 April 2012 in Zoucheng City, Shangdong Province, between:

Yanzhou Coal Mining Company Limited, a company with limited liability incorporated and validly exists under the laws of PRC listing in the Shanghai Stock Exchange, Hong Kong Stock Exchange and New York Stock Exchange, with registry number of business license for legal person as 370000400001016 and registered office at 298 Fushannan Road Zoucheng, Shandong Province and its legal representative being Li Weimin (hereinafter referred to as “the Company”).

Yankuang Group Company Limited, a wholly state-owned enterprise incorporated and validly exists under the laws of PRC with registry number of business license for legal person as 370000018019807 and registered office at 298 Fushannan Road Zoucheng, Shandong Province and its legal representative being Wang Xin (hereinafter referred to as “Yankuang Group”).

Where:

1. On 25 September 1997, Yankuang Group, as the only promoter, founded the Company pursuant to PRC laws. As part of its reorganization, Yankuang Group injected assets and liabilities relating to its major coal production business into the Company, and Yankuang Group retained the remaining assets and liabilities.

2. After successive IPO and listing of the Company in the Shanghai Stock Exchange, Hong Kong Stock Exchange and New York Stock Exchange, Yankuang Group remains the controlling stockholder of the Company, holding 52.86% of stocks in the Company as at the date hereof.

3. On 31 October 2008, Yankuang Group and the Company entered into Provision of Coal Products and Materials Agreement, which were ratified by independent shareholders on 23 December 2008. This agreement was effective for 3 years from 1 January 2009 to 31 December 2011. Pursuant to the original Provision of Coal Products and Materials Agreement, Yankuang Group daily provided the Company with coal products and materials.

4. Upon completion of performance of the above agreement, the Company shall continue to provide Yankuang Group with coal products and methanol for coal deep processing, electrolytic aluminium production, cement production, other production and daily use.

5. The Materials Supplying Centre of the Company is qualified in materials dealing which can sell materials centralized purchased from third parties to Yankuang Group. This enhances capital utilisation and provides gains from supply of materials.

6. The Company is well positioned in purchasing coal mining equipment which can lease equipment to Yankuang Group through centralized equipment purchase from third party. This enhances capital utilisation and provides gains from leasing.

Pursuant to Contract Law of the People’s Republic of China, relevant laws and regulations, and local regulatory requirements in the listing locations of the Company, Yankuang Group and the Company, through friendly discussion, agree on provision of product, materials and equipment lease as follow:

1. Definition and explanations

1.1 Definition

Terms herein have the following meaning unless otherwise required by the context:

“Fiscal year”	refers to	each year from 1 January to 31 December;
“Half year”	refers to	1 January to 30 June or from 1 July to 31 December for each fiscal year;
“Hong Kong Stock Exchange”	refers to	the Stock Exchange of Hong Kong Limited;
“Market price”	refers to	the market price of agreed provision calculated pursuant to clause 4.2 of the agreement under applicable circumstances;
“Materials”	refers to	the materials, such as steel, provided by the Company and its subsidiaries to Yankuang Group and its subsidiaries pursuant to clause 2.1.3 of this agreement;
“Equipment”	refers to	the equipment leased by the Company and its subsidiaries to Yankuang Group and its subsidiaries pursuant to clause 2.1.4 of this agreement;
“PRC”	refers to	People’s Republic of China;
“RMB”	refers to	Renminbi, the legal currency of PRC;
“Previous Connected Transaction Agreement”	refers to	the Provision of Coal Products and Materials Agreement entered between Yankuang Group and the Company on 31 October 2008;
“State regulated price”	refers to	price of provision of products, materials and equipment lease set in accordance with clause 4.3;
“Subsidiaries”	refers to	the holding subsidiaries and other affiliates of Yankuang Group and the Company;
“Agreed Provision”	refers to	The provision of coal products, methanol and materials and equipment lease by the Company to Yankuang Group.

1.2 Interpretation

Unless the contrary intention appears,

(1) Where the agreed provision is involved herein, both Yankuang Group and the Company shall refer to itself as well as its subsidiaries. Yankuang Group also includes its associated persons from time to time (“associated persons” has the meaning ascribed to it in the Rules Governing the Listing of Securities of the Stock Exchange of Hong Kong Limited). In this agreement, the subsidiaries of Yankuang Group exclude the Company and its subsidiaries;

(2) Any party in the agreement and any other agreements include its successors or approved assignees (if any);

(3) Clauses and appendixes refer to clauses and appendixes hereof;

(4) Any clauses herein shall not be interpreted as the prohibition to postponing, revision, modification or supplement of the agreement;

(5) The title of the agreement is intended for convenience purpose only and shall not affect the content and explanation hereof.

2. Agreed provision by the Company to Yankuang Group

2.1 Pursuant to this agreement, the Company shall provide Yankuang Group with the following agreed provision:

2.1.1 Coal products;

2.1.2 Methanol;

2.1.3 Materials: steels, timbers, grease, bearings, labour protection appliance and other similar materials;

2.1.4 Equipment lease.

2.2 The Company shall provide Yankuang Group with agreed provision pursuant to the terms hereof and specific terms (including but not limited to quantity and quality) in written agreements entered between both parties from time to time.

3. Execution

3.1 Yankuang Group shall submit the agreed provision demand plan for the coming year or service adjustment plan for the current year (“annual provision plan”) to the Company prior to 31 November each year. The parties shall agree on the plan before 31 December of the year.

3.2 The parties and their subsidiaries and associated person of Yankuang Group shall enter into specific agreed provision / lease contracts in accordance with this agreement (including annual provision plan developed under this agreement).

3.3 Annual provision plans or specific provision / lease contracts can be adjusted during the course of execution upon agreement by both parties where necessary.

3.4 Payments for agreed provision can be made in one time or by instalments.

3.5 Both parties shall enter the items of account payable or account receivable of continuing connected transaction into the account book before the last business day of each calendar month. All the payments of continuing connected transaction of each calendar month other than the outstanding transaction or disputed ones shall be settled in the next month.

4. Pricing basis of agreed provision

4.1 Prices of coal products, methanol, materials and equipment lease shall be determined in accordance with market price, which should be calculated and estimated before the beginning of the fiscal year where possible.

4.2 Prices of agreed provision shall be determined by in accordance with market price and general commercial terms as below:

(1) The prices of identical or similar agreed provision by an independent third party in the area of provision or in the vicinity in accordance with general commercial terms during its ordinary course of business; or

(2) Where item (1) is not applicable, the prices of identical or similar materials provided by an independent third party within PRC territory in accordance with general commercial terms during its ordinary course of business.

4.3 At any time, both parties agree to adopt any state regulated price effective and applicable to the agreed provision hereof at any time. Such price is required for such agreed provision in accordance to laws, regulations, decrees or pricing policies (as the case may be) made by relevant Chinese government agencies.

5. Representations, warranties and undertakings by the Company

5.1 The Company, a limited liability company incorporated under the laws of PRC with the status of an independent legal entity, currently holds a valid business license.

5.2 The Company has been engaging in business activities in accordance with the laws, and has not been involved in any business exceeding the scope set by laws.

5.3 The entrance or performance of obligations hereof by the Company neither breaches nor legally conflicts with any other agreements it entered or its articles of corporation.

5.4 The Company guarantees to provide all agreed provision hereunder to Yankuang Group pursuant to general commercial terms.

5.5 The Company undertakes to provide Yankuang Group with agreed provision in accordance with the requirements and standards as negotiated and set by the parties from time to time.

5.6 The Company undertakes to maintain adequate qualified employees and to provide adequate guidance and instruction for them to provide Yankuang Group with agreed provision in fulfilling the reasonable requirements by the Company.

5.7 The Company guarantees to be liable for any violation of terms hereof in the agreed provision by its subsidiaries pursuant to this agreement.

5.8 The Company guarantees that it will prompt its subsidiaries and associated persons to take any necessary action to fulfil the obligations under this agreement.

5.9 The Company undertakes to take reasonable measures to avoid any losses of Yankuang Group arising from negligence during its performance of obligations hereof. In case of any losses arising therefrom, the Company guarantees to compensate for all losses of Yankuang Group.

6. Representations, warranties and undertakings by Yankuang Group

6.1 Yankuang Group, a wholly state owned enterprise with limited liability and a status of independent legal entity incorporated under the PRC laws, currently holds a valid business license.

6.2 Yankuang Group has been engaging in business activities in accordance with the laws, and never involves in any business exceeding the scope set by laws.

6.3 The entrance or performance of obligations hereof by Yankuang Group neither breaches nor legally conflicts with any other agreements it entered or its articles of corporation.

6.4 Yankuang Group guarantees to make timely payment to the Company for the agreed provision in accordance with this agreement and to be liable for any violation of terms hereof.

6.5 Yankuang Group undertakes to take reasonable measures to avoid any losses of the Company arising from negligence during its performance of obligations hereof. In case of any losses arising therefrom, Yankuang Group guarantees to compensate for all losses of the Company.

7. Termination of agreed provision

7.1 Unless otherwise stated herein, any party may terminate the provision or purchase of certain kind of coal products, methanol or materials or lease or rent of equipment by providing not less than 12 months prior written notice to the other party. The kind of provision or purchase of certain kind of coal products, methanol or materials or lease or rent of equipment to be terminated and the effective date of such termination shall be specified in the termination notice. Termination shall be set forth automatically from the effective date specified in notification without affecting other rights and obligations of Yankuang Group or the Company hereunder.

7.2 For the avoidance of doubt, both parties agree that, where Yankuang Group has issued termination notice of agreed provision pursuant to clause 7.1, the Company shall continue its agreed provision to Yankuang Group pursuant to applicable provision clauses other than the requirement(s) on term of provision from the date of the notice until the termination effective date. The applicable clauses shall include relevant terms of the Supplementary Agreement entered in accordance with clause 8.3.

8. Effective date, term and termination of agreement

8.1 Unless otherwise agreed in written form by both parties, this Agreement shall apply with retrospective effect from 1 January 2012, subject to signatures by the legal representatives or authorized representatives of both parties and approval by independent shareholders or the board of directors pursuant to approval permission and local regulatory requirements in the listing locations of the Company.

8.2 This agreement is valid for 3 years starting from 1 January 2012 until 31 December 2014. Notwithstanding the above, upon transfer of subsidiaries or coal mines of Yankuang Group as the tenant of the equipment to the Company, equipment lease hereunder shall terminate automatically. The previous Connected Transactions Agreement shall terminate automatically upon effect of this agreement.

8.3 In case of any need to modify this agreement, both parties shall enter into a supplemental agreement on the relevant issues prior to the end of November in the year prior to the relevant fiscal year specified in such supplemental agreement. In the event of failure of both parties to achieve consent on the terms of the supplemental agreement before the above time limit, the current terms of provision shall be applicable to the next fiscal year until an agreement is reached or the disputes are settled by both parties pursuant to clause 8.4.

8.4 Where the parties fail to reach an agreement in connection with any matters related to the transaction price (including but not limited to the amount and the time of payment), such matters shall, upon the request of any party, be submitted to Zoucheng City Pricing Bureau as a mediator for determining solution. Such decision by Zoucheng City Price Bureau shall be final and binding on both parties.

8.5 Both parties may negotiate and enter into a new provision agreement for coal products, methanol and materials or new lease agreement prior to the termination of this Agreement to ensure normal operation and production of both parties after such termination.

8.6 In case of material default of any clauses hereof by any party (“defaulting party”) , this agreement may be terminated immediately by the other party where the defaulting party fail to provide remediation of such default within the reasonable period requested in written notice by the other party for remediation of such act of default, or where such act of default is not remediable.

8.7 Termination of this Agreement shall not harm any occurred rights or duties of any party.

9. Performance

In accordance with the regulatory requirements of the listing location of the Company (including but not limited to “Hong Kong Stock Exchange Listing Rules” and “Shanghai Stock Exchange Stock Listing Rules”), an annual quota of transaction shall be set for continuing connected transactions under this Agreement. Where the annual quota for agreed provision is requires the approval by independent shareholders of the Company, the continuity of such transactions shall be subject to the approval of independent shareholders of the Company. Where, in any year, the actual occurring amount of such transactions exceeds the annual quota approved by independent shareholders of the Company, both parties should terminate the transaction of products and materials and equipment lease in excess of the annual quota approved by independent shareholders prior to the approval procedure of the Company in compliance to the regulatory requirements of the listing locations.

10. Announcement

Any party shall not make or permit others to make (where one party is capable to control the other) any announcement related to the subject of this agreement or any relevant issues without prior written consent of the other party, save for announcement made in compliance with requirements by law or the China Securities Regulatory Commission, Shanghai Stock Exchange, the Hong Kong Stock Exchange , the Securities and Futures Commission in Hong Kong, the New York Stock Exchange, the United States Securities and Exchange Commission or regulatory authorities in any other listing locations of the Company.

11. Other requirements

11.1 Neither party shall assign or transfer its rights or obligations of this agreement to any third parties without prior written consent of the other party.

11.2 This Agreement and its Appendix shall constitute a complete agreement by both parties on all issues herein and replace all prior agreements by both parties related to such transactions. In case of violation of any clauses of the previous connected transactions agreement by any party (“defaulting party”), the effect of this agreement shall not affect any rights entitled by the other party (“non-defaulting party”) due to the violation of the defaulting party.

11.3 Should any clauses herein become illegal, invalid or unenforceable at any time, the other clauses shall not be affected.

11.4 In case of any failure or delay of any party in performance of its obligations of this agreement pursuant to the requirements hereof due to force majeure, the party shall provide immediate written notification for the other party and shall not be deemed as default. The other party shall provide a reasonable period for the said party to perform its duties and obligations according to the situation.

11.5 Both parties agree to bear all relevant costs and expenses required by relevant laws of PRC arising from the entrance of this agreement or evenly distribute such costs and expenses where there is no relevant regulation.

11.6 Any amendments of this agreement or its appendix shall be provided in written form where possible and shall be signed by both parties and approved via appropriate legal procedures.

11.7 Unless otherwise required, failure or delay in exercising its rights, powers or privileges hereunder by any party shall not constitute a waiver of such rights, powers or privileges, and a single or partial exercise of such right, power or privilege does not exclude its exercise of any other rights, powers or privileges.

11.8 The Appendix is an integral part of this Agreement, and shall be equally binding upon both parties as the Agreement itself.

12. Notice

12.1 In accordance with this Agreement, any notices or other documents shall be made in written form and delivered by hand, by mail or by fax to the relevant parties to the following addresses:

(a)	The Company:	Yanzhou Coal Mining Company Limited
	Address:	298 Fushannan Road, Zoucheng City, Shandong Province P.R. of China
	Tel:	0537-5382232
	Fax:	0537-5382831

(b)	The Company:	Yanzhou Coal Mining Company Limited
	Address:	298 Fushannan Road, Zoucheng City, Shandong Province P.R. of China
	Tel:	0537-5383916
	Fax:	0537-5382032

12.2 Arrival time of notices or documents:

(a) Delivery by hand: upon hand-over of the letter;

(b) Delivery by mail: within five (5) working days after posting (excluding Saturdays, Sundays and public holidays in PRC); and

(c) Delivery by fax: upon receipt of fax. Where the fax is received outside business hours, the receiving time shall be the general business hours of the second day (excluding Saturdays, Sundays and public holidays in PRC) and the sender shall present the confirmation from the fax machine to certify completion of faxing.

13. Applicable laws and jurisdictions

This agreement shall be governed by and construed by the applicable laws of PRC. Any disputes (including any issues concerning the existence, validity, and rights and duties of both parties under this Agreement) arising from or in connection with this Agreement unable to be resolved through friendly negotiation may be submitted to Jining Arbitration Commission located in Jining city for arbitration according to its prevailing Provision Rules of Procedure upon request of any party. This arbitrate award shall be final and binding upon both parties.

14. Others

This agreement is provided in Chinese.

Copies of this agreement, which are made in quadruplicate with equal legal effects, shall be held respectively by both parties (2 copies for each party) upon signature and sealing by the legal or authorized representatives of both parties.

Appendix: Provision of coal products, methanol and materials by the Company to Yankuang Group

Item no.	Item	Pricing basis	Provision period	Notice period for termination
1	Coal products	Market price	3 years	12 months
2	Methyl alcohol	Market price	3 years	12 months
3	Materials (including but not limited to steel, timber, oil & grease, bearings, labour protection articles and other related material supplies)	Market price	3 years	12 months
4	Lease of coal mining facilities	Market price	3 years	/

In witness hereof, this agreement has been signed on the date specified on the first page.

Yanzhou Coal Mining Company Limited (Seal)

Legal representative

/authorized representative: /s/ Li Weimin

Yankuang Group Company Limited (Seal) Legal representative

/authorized representative: /s/ Wang Xin

EX-4.6

EXHIBIT 4.6

Code : 05

Provision of Electricity and Heat Agreement

between

Yanzhou Coal Mining Company Limited

and

Yankuang Group Company Limited

23 April 2012

This agreement is made and come into force of this day of 23 April 2012 in Zoucheng City, Shangdong Province, between:

Yanzhou Coal Mining Company Limited, a company with limited liability incorporated and validly exists under the laws of PRC listing in the Shanghai Stock Exchange, Hong Kong Stock Exchange and New York Stock Exchange, with registry number of business license for legal person as 370000400001016 and registered office at 298 Fushannan Road Zoucheng, Shandong Province and its legal representative being Li Weimin (hereinafter referred to as “the Company”).

Yankuang Group Company Limited, a wholly state-owned enterprise incorporated and validly exists under the laws of PRC with registry number of business license for legal person as 370000018019807 and registered office at 298 Fushannan Road Zoucheng, Shandong Province and its legal representative being Wang Xin (hereinafter referred to as “Yankuang Group”).

Where:

1. On 25 September 1997, Yankuang Group, as the only promoter, founded the Company pursuant to PRC laws. As part of its reorganization, Yankuang Group injected assets and liabilities relating to its major coal production business into the Company, and Yankuang Group retained the remaining assets and liabilities.

2. After successive IPO and listing of the Company in the Shanghai Stock Exchange, Hong Kong Stock Exchange and New York Stock Exchange, Yankuang Group remains the controlling stockholder of the Company, holding 52.86% of stocks in the Company as at the date hereof.

3. On 31 October 2008, Yankuang Group and the Company entered into Provision of Electricity and Heat Agreement, which were ratified by independent shareholders on 23 December 2008. This agreement was effective for 3 years from 1 January 2009 to 31 December 2011. Pursuant to the original Provision of Electricity and Heat Agreement, Yankuang Group daily provided the Company with electricity and heat.

Pursuant to Contract Law of the People’s Republic of China, relevant laws and regulations, and local regulatory requirements in the listing locations of the Company, Yankuang Group and the Company, through friendly discussion, agree on continued provision of electricity and heat as follow:

1. Definition and explanations

1.1 Definition

Terms herein have the following meaning unless otherwise required by the context:

“Fiscal year”	refers to	each year from 1 January to 31 December;
“Half year”	refers to	1 January to 30 June or from 1 July to 31 December for each fiscal year;
“Hong Kong Stock Exchange”	refers to	the Stock Exchange of Hong Kong Limited;
“PRC”	refers to	People’s Republic of China;
“Previous Connected Transaction Agreement”	refers to	the Provision of Electricity and Heat Agreement entered between the Company and Yankuang Group on 31 October 2008;
“RMB”	refers to	Renminbi, the legal currency of PRC;
“Subsidiaries”	refers to	the holding subsidiaries and other affiliates of Yankuang Group and the Company.

1.2 Interpretation

Unless the contrary intention appears,

(1) Where the provision of electricity and heat is involved herein, both Yankuang Group and the Company shall refer to itself as well as its subsidiaries. Yankuang Group also includes its associated persons from time to time (“associated persons” has the meaning ascribed to it in the Rules Governing the Listing of Securities of the Stock Exchange of Hong Kong Limited). In this agreement, the subsidiaries of Yankuang Group exclude the Company and its subsidiaries;

(2) Any party in the agreement and any other agreements include its successors or approved assignees (if any);

(3) Clauses and appendixes refer to clauses and appendixes hereof;

(4) Any clauses herein shall not be interpreted as the prohibition to postponing, revision, modification or supplement of the agreement;

(5) The title of the agreement is intended for convenience purpose only and shall not affect the content and explanation hereof.

2. Provision of electricity and heat

The Company shall provide Yankuang Group with electricity and heat pursuant to the terms hereof and specific terms (including but not limited to quantity and quality) in written agreements entered between both parties from time to time.

3. Execution

3.1 Yankuang Group shall submit the electricity and heat demand plan for the coming year or service adjustment plan for the current year (“annual provision plan”) to the Company prior to 31 November each year. The parties shall agree on the plan before 31 December of the year.

3.2 The parties and their subsidiaries and associated person of Yankuang Group shall enter into specific provision of electricity and heat contracts in accordance with this agreement (including annual provision plan developed under this agreement).

3.3 Annual provision plans or specific provision contracts can be adjusted during the course of execution upon agreement by both parties where necessary.

3.4 Payments for electricity and heat provision can be made in one time or by instalments.

3.5 Both parties shall record account payable or account receivable of continuing connected transaction into the account book before the last business day of each calendar month. All the payments of continuing connected transaction of each calendar month other than the outstanding transaction or disputed ones shall be settled in the next month.

4. Pricing basis of provision of electricity and heat

The price of provision of electricity and heat is equal to that approved by governmental authorities (including but not limited to Shandong Province Price Bureau and/or Jining Municipal Price Bureau), and calculated based on the actual consumption by Yankuang Group.

5. Representations, warranties and undertakings by the Company

5.1 The Company, a limited liability company incorporated under the laws of PRC with the status of an independent legal entity, currently holds a valid business license.

5.2 The Company has been engaging in business activities in accordance with the laws, and has not been involved in any business exceeding the scope set by laws.

5.3 The entrance or performance of obligations hereof by the Company neither breaches nor legally conflicts with any other agreements it entered or its articles of corporation.

5.4 The Company undertakes to provide Yankuang Group with electricity and heat in accordance with the requirements and standards as negotiated and set by the parties from time to time.

5.5 The Company undertakes to maintain adequate qualified employees and to provide adequate guidance and instruction for them to provide Yankuang Group with electricity and heat in fulfilling the reasonable requirements by the Company.

5.6 The Company guarantees that any provision of electricity and heat by its subsidiaries to Yankuang Group and / or its subsidiaries and associated person shall conform to the clauses of this agreement.

5.7 The Company guarantees to be liable for any violation of terms hereof in the provision of electricity and heat by its subsidiaries pursuant to this agreement.

5.8 The Company guarantees that it will prompt its subsidiaries and associated persons to take any necessary action to fulfil the obligations under this agreement.

5.9 The Company undertakes to take reasonable measures to avoid any losses of Yankuang Group arising from negligence during its performance of obligations hereof. In case of any losses arising therefrom, the Company guarantees to compensate for all losses of Yankuang Group.

6. Representations, warranties and undertakings by Yankuang Group

6.1 Yankuang Group, a wholly state owned enterprise with limited liability and a status of independent legal entity incorporated under the PRC laws, currently holds a valid business license.

6.2 Yankuang Group has been engaging in business activities in accordance with the laws, and never involves in any business exceeding the scope set by laws.

6.3 The entrance or performance of obligations hereof by Yankuang Group neither breaches nor legally conflicts with any other agreements it entered or its articles of corporation.

6.4 Yankuang Group guarantees to make timely payment to the Company for the provision of electricity and heat in accordance with this agreement and to be liable for any violation of terms hereof.

6.5 Yankuang Group undertakes to take reasonable measures to avoid any losses of the Company arising from negligence during its performance of obligations hereof. In case of any losses arising therefrom, Yankuang Group guarantees to compensate for all losses of the Company.

7. Termination of provision of electricity and heat

7.1 Unless otherwise stated herein, any party may terminate the provision or purchase of electricity or heat by providing not less than 12 months prior written notice to the other party. The effective date of such termination of provision / purchase of electricity or heat shall be specified in the termination notice. Termination shall be set forth automatically from the effective date specified in notification without affecting other rights and obligations of Yankuang Group or the Company hereunder.

7.2 For the avoidance of doubt, both parties agree that, where Yankuang Group has issued termination notice of provision of electricity or heat pursuant to clause 7.1, the Company shall continue its provision of electricity or heat to Yankuang Group pursuant to applicable provision clauses other than the requirement(s) on term of provision from the date of the notice until the termination effective date. The applicable clauses shall include relevant terms of the Supplementary Agreement entered in accordance with clause 8.3.

8. Effective date, term and termination of agreement

8.1 Unless otherwise agreed in written form by both parties, this Agreement shall apply with retrospective effect from 1 January 2012, subject to signatures by the legal representatives or authorized representatives of both parties and approval by independent shareholders or the board of directors pursuant to approval permission and local regulatory requirements in the listing locations of the Company.

8.2 This agreement is valid for 3 years starting from 1 January 2012 until 31 December 2014. The previous Connected Transactions Agreement shall terminate automatically upon effect of this agreement.

8.3 In case of any need to modify this agreement, both parties shall enter into a supplemental agreement on the relevant issues prior to the end of November in the year prior to the relevant fiscal year specified in such supplemental agreement. In the event of failure of both parties to achieve consent on the terms of the supplemental agreement before the above time limit, the current terms of provision shall be applicable to the next fiscal year until an agreement is reached or the disputes are settled by both parties pursuant to clause 8.4.

8.4 Where the parties fail to reach an agreement in connection with any matters related to the transaction price (including but not limited to the amount and the time of payment), such matters shall, upon the request of any party, be submitted to Zoucheng City Price Bureau as a mediator for determining solution. Such decision by Zoucheng City Price Bureau shall be final and binding on both parties.

8.5 Both parties may negotiate and enter into a new provision agreement for electricity and heat prior to the termination of this Agreement to ensure normal operation and production of both parties after such termination.

8.6 In case of material default of any clauses hereof by any party (“defaulting party”) , this agreement may be terminated immediately by the other party where the defaulting party fail to provide remediation of such default within the reasonable period requested in written notice by the other party for remediation of such act of default, or where such act of default is not remediable.

8.7 Termination of this Agreement shall not harm any occurred rights or duties of any party.

9. Performance

In accordance with the regulatory requirements of the listing location of the Company (including but not limited to Hong Kong Stock Exchange Listing Rules and Shanghai Stock Exchange Stock Listing Rules), an annual quota of transaction shall be set for continuing connected transactions under this Agreement. Where the annual quota for provision of electricity and heat is requires the approval by independent shareholders of the Company, the continuity of such transactions shall be subject to the approval of independent shareholders of the Company. Where, in any year, the actual occurring amount of such transactions exceeds the annual quota approved by independent shareholders of the Company, both parties should terminate the provision of electricity and heat in excess of the annual quota approved by independent shareholders prior to the approval procedure of the Company in compliance to the regulatory requirements of the listing locations.

10. Announcement

Any party shall not make or permit others to make (where one party is capable to control the other) any announcement related to the subject of this agreement or any relevant issues without prior written consent of the other party, save for announcement made in compliance with requirements by law or the China Securities Regulatory Commission, Shanghai Stock Exchange, the Hong Kong Stock Exchange , the Securities and Futures Commission in Hong Kong, the New York Stock Exchange, the United States Securities and Exchange Commission or regulatory authorities in any other listing locations of the Company.

11. Other requirements

11.1 Neither party shall assign or transfer its rights or obligations of this agreement to any third parties without prior written consent of the other party.

11.2 This Agreement and its Appendix shall constitute a complete agreement by both parties on all issues herein and replace all prior agreements by both parties related to such transactions. In case of violation of any clauses of the previous connected transactions agreement by any party (“defaulting party”), the effect of this agreement shall not affect any rights entitled by the other party (“non-defaulting party”) due to the violation of the defaulting party.

11.3 Should any clauses herein become illegal, invalid or unenforceable at any time, the other clauses shall not be affected.

11.4 In case of any failure or delay of any party in performance of its obligations of this agreement pursuant to the requirements hereof due to force majeure, the party shall provide immediate written notification for the other party and shall not be deemed as default. The other party shall provide a reasonable period for the said party to perform its duties and obligations according to the situation.

11.5 Both parties agree to bear all relevant costs and expenses required by relevant laws of PRC arising from the entrance of this agreement or evenly distribute such costs and expenses where there is no relevant regulation.

11.6 Any amendments of this agreement or its appendix shall be provided in written form where possible and shall be signed by both parties and approved via appropriate legal procedures.

11.7 Unless otherwise required, failure or delay in exercising its rights, powers or privileges hereunder by any party shall not constitute a waiver of such rights, powers or privileges, and a single or partial exercise of such right, power or privilege does not exclude its exercise of any other rights, powers or privileges.

11.8 The Appendix is an integral part of this Agreement, and shall be equally binding upon both parties as the Agreement itself.

12. Notice

12.1 In accordance with this Agreement, any notices or other documents shall be made in written form and delivered by hand, by mail or by fax to the relevant parties to the following addresses:

(a) Yankuang Group:	Yankuang Group Company Limited
Address:	298 Fushannan Road, Zoucheng City, Shandong Province P.R. of China
Tel:	0537-5382232
Fax:	0537-5382831

(b) The Company:	Yanzhou Coal Mining Company Limited
Address:	298 Fushannan Road, Zoucheng City, Shandong Province P.R. of China
Tel:	0537-5383196
Fax:	0537-5382032

12.2 Arrival time of notices or documents:

(a) Delivery by hand: upon hand-over of the letter;

(b) Delivery by mail: within five (5) working days after posting (excluding Saturdays, Sundays and public holidays in PRC); and

(c) Delivery by fax: upon receipt of fax. Where the fax is received outside business hours, the receiving time shall be the general business hours of the second day (excluding Saturdays, Sundays and public holidays in PRC) and the sender shall present the confirmation from the fax machine to certify completion of faxing.

13. Applicable laws and jurisdictions

This agreement shall be governed by and construed by the applicable laws of PRC. Any disputes (including any issues concerning the existence, validity, and rights and duties of both parties under this Agreement) arising from or in connection with this Agreement unable to be resolved through friendly negotiation may be submitted to Jining Arbitration Commission located in Jining city for arbitration according to its prevailing Provision Rules of Procedure upon request of any party. This arbitrate award shall be final and binding upon both parties.

14. Others

This agreement is provided in Chinese.

Copies of this agreement, which are made in quadruplicate with equal legal effects, shall be held respectively by both parties (2 copies for each party) upon signature and sealing by the legal or authorized representatives of both parties.

Appendix: Provision of electricity and heat by the Company to Yankuang Group

Item	Pricing basis	Provision period	Notice period for termination
Electricity supply	Negotiated price	3 years	12 months
Heat supply	Negotiated price	3 years	12 months

In witness hereof, this agreement has been signed on the date specified on the first page.

Yanzhou Coal Mining Company Limited (Seal)

Legal representative

/authorized representative: /s/ Li Weimin            

Yankuang Group Company Limited (Seal)

Legal representative

/authorized representative: /s/ Wang Xin            

EX-4.7

EXHIBIT 4.7

Asset Transfer Agreement

between

Yankuang Group Company Limited,

Yankuang Group Beisu Coal Mine Company Limited

and

Yanzhou Coal Mining Company Limited

This agreement is made and come into force of this day of 23 April 2012 in Zoucheng City, Shangdong Province, between:

Transferors:

Yankuang Group Company Limited (hereinafter referred to as “Yankuang Group”)

Address: 298, Fushannan Road, Zoucheng City, Shandong Province, PRC

Legal representative: Wang Xin

Yankuang Group Beisu Coal Mine Company Limited (hereinafter referred to as “Beisu Company”)

Address: Beisu, Zoucheng City, Shangdong Province

Legal representative: Zhang Chuanwu

Yankuang Group and Beisu Company are collectively referred to as “transferors”.

Transferee:

Yanzhou Coal Mining Company Limited

Address: 298, Fushannan Road, Zoucheng City, Shandong Province, PRC

Legal representative: Li Weimin

The transferors and transferee are collectively referred to as “the Parties”.

Where:

1. Yankuang Group and Beisu Company are limited liability companies incorporated and validly exists under the laws of PRC. Yankuang Group is the controlling shareholder of Beisu Company and the transferee.

2. The transferee is a listed company incorporated in PRC under the laws of PRC and obtained approval by the China Securities Regulatory Commission for issuance of A shares and approved by Shanghai Stock Exchange for listing.

3. The transferee intends to purchase the entire assets of Yangcun coal mine from Yankuang Group and the entire asset of Beisu mines from Yankuang Group and Beisu Company thereunder. Yankuang Group and Beisu Company agreed to transfer the above assets to the transferee.

4. Unless otherwise provided hereunder, there is no connection between the rights and obligations of Yankuang Group and Beisu Company hereunder.

Pursuant to relevant laws and regulations of PRC and through friendly negotiation, the Parties reached the following agreement:

1. Definition

Terms herein have the following meaning unless otherwise required by the context:

“Target assets”	refers to	Assets, rights or liabilities related to Beisu and Yangcun coal mines intended for transfer hereunder, including but not limited to, intangible assets such as the mining rights in Beisu and Yangcun coal mines, building ownership, external equity investment and all machinery equipment and other fixed assets and liabilities related to Beisu and Yangcun coal mines, the details of which are set out in the valuation report of this transfer prepared by Beijing China Enterprise Appraisals
“Target equity”	refers to	The external equity investment related to Beisu and Yangcun coal mines involved in the target assets, i.e. Yankuang Group’s 100% equity interest in Beisheng Industry and Trade, 39.77% equity interest in Shengyang Wood and 20% equity interest in Jiemei Wall Materials
“Assets Transfer”	refers to	the disposal of the Target Assets by the Transferors and the purchase of the Target Assets by the Company pursuant to the this Agreement;
“Effective date”	refers to	The day when the Parties agreed and confirmed the full fulfilment or waiver by the entitled party of the effective criteria required in clause 10.1 herein
“Delivery Date”	refers to	the date on which the delivery of the Target Assets to the transferee commences as agreed between the Parties for the Assets Transfer Agreement but no later than the twentieth business days after the this Agreement becomes effective
“Valuation Date”	refers to	31 August 2011
“Appraised Value of Target Assets”	refers to	the net asset value of Target Assets appraised by Beijing China Enterprise Appraisals on the Valuation Date and approved by the document Lu Guo Zi Can Quan Han No. [2012] 41 from SASAC

“Transition Period”	refers to	the period between Valuation Date and Delivery Date
“CSRC”	refers to	China Securities Regulatory Commission
“SASAC”	refers to	State-owned Assets Supervision and Administration Commission of Shandong Provincial People’s Government
“Valuation Report”	refers to	The “Audited Valuation Report on the Proposed Transfer of Assets and Liabilities of Beisu and Yangcun Coal Mines from Yankuang Group Company Limited” (Zhong Qi Hua Ping Bao Zi (2010) No. 3040) prepared by Beijing China Enterprise Appraisals

2. Asset Transfer and Consideration Payment

1. The transferors agreed to dispose its entire Target Assets to the transferee pursuant to this agreement, and the transferee agreed to purchase the entire Target Assets from the transferors pursuant to this agreement.

2. Consideration and payment of Target Assets

(a) The Parties agreed that the consideration of RMB824,142,300.00 for the transferee in purchasing the Target Assets is determined based on the Appraised Value of Target Assets in the valuation report .

(b) The Parties agreed that the consideration shall be paid by the transferee on the Delivery Date by one-off cash crediting into the bank account specified by the transferors.

3. Agreement on gains and losses during the Transition Period

(a) The Parties agreed that all gains and losses of the Target Assets other than the Targeted Equity during the Transition Period in Beisu and Yangcun coal mines net of the respective value of coal reserves utilised shall be attributable to the transferors.

In this agreement, respective value of coal reserves utilised = original coal production volume of Target Assets during the Transition Period as confirmed by the Parties x appraised unit price ; where, appraised unit price = appraised value of the mining rights in Beisu and Yangcun coal mines / recoverable reserves of Beisu and Yangcun coal mines as at the Valuation Date. (Figures for the appraised value of mining rights in Beisu and Yangcun coal mines and the recoverable reserves of Beisu and Yangcun coal mines as at the Valuation Date shall be taken as the data approved / filed by relevant government departments.

(b) Gains and losses of Target Equity during the Transition Period shall be entitled or borne by the transferee.

4. Delivery of Target Assets

4.1 Prerequisites of delivery

(a) The effective criteria stipulated in clause 10.1 herein is fulfilled or waived by the entitled party.

(b) All representation, warranties and undertakings are true, accurate and complete in all aspects during the period from the date herein until the Delivery Date.

(c) No material adverse change has occurred in the asset condition, financial position, business operation and outlook of Target Assets during the period from the Valuation Date until the Delivery Date.

4.2 Delivery of Target Assets

(a) Upon this agreement coming into effect, the transferors and transferee shall commence preparation of delivery procedures of Target Assets and confirm Delivery Date, which shall be no later than the 20^th business day from the effective date of this agreement.

(b) The delivery of all physical assets, including but not limited to housing, equipment, financial statements, business contracts, operation records, operation information, instruction manuals, maintenance manual, training manual as well as relevant technical record, technical information, technical drawings and technical manuals, shall be completed within 5 business days after the Delivery Date.

(c) Amendments on the articles of association of the company owning the Asset Equity and registration procedures for transfer of equity shall be completed within 15 business days after the Delivery Date.

(d) Renaming and license renewal procedures for the mining rights, housing and production qualification certificates for the Target Assets shall be completed at the earliest after the Delivery Date in accordance with the requirements of relevant authorities.

(e) Unless otherwise stipulated herein, in case of failure to complete the above procedures for change of registration, approval or notification within the aforementioned timeframe, the transferee shall have the right to select provision of an indent, or provide written notification of its decision that such assets to be deemed as not acquired and as such the transferors shall, within 20 business days upon receipt of such notification , compensate the transferee for all fees and losses arising therefrom, including but not limited to the compensation the transferee actually paid for acquiring the respective assets and all fees for obtaining replacement for the assets, businesses, contracts and other rights and obligations.

(f) Upon completion of delivery of Target Assets, the transferee shall have the right to inspect the Target Assets pursuant to the Valuation Report and, in case of inadequate quantity or defects, to request the transferors to refund certain compensation paid for such respective portion.

(g) Unless otherwise provided by laws, regulations and this agreement, all Target Assets shall be deemed as lawfully and validly transferred and delivered to the transferee on the Delivery Date regardless of the completion of procedures for renaming registration, approval or notification. Starting from the Delivery Date (inclusive), all ownerships and any rights, interests and debts related to or arising from such ownerships of the Target Assets shall be entitled or borne by the transferee.

3. Representations and Warranties of the Transferors

1. Yankuang Group and Beisu Company are both limited liability enterprises incorporated and validly exist under the laws of PRC and are lawfully entitled to the entire Target Assets and operate their businesses. Yankuang Group and Beisu Company both hold necessary permission and are authorised to enter into this agreement and perform the obligations hereof.

2. With the exception of those disclosed to the transferee, there is no on-going or potential dispute as to the debt, litigation, arbitration, administrative procedures or other governmental investigation on the Target Assets.

3. With the exception of those disclosed to the transferee, the Target Assets are lawfully and validly acquired with all compensation and fees therefor paid and all necessary registration, filing and approval completed pursuant to laws.

4. Since the entrance of this agreement, the transferors shall not dispose the Target Assets and their relevant businesses not in the ordinary course of business, including but not limited to transferring, leasing, granting rights to or creating hypothecs, liens or otherwise on third parties, with the exception of transfer of Target Assets to the transferee pursuant hereto.

5. The transferors has provided the transferee with true and complete disclosure on the entire debts or contingent debts in the Target Assets. With the exception of those disclosed to the transferee, there are no other amount payable, collaterals, pledge, liens or guarantees or counter-guarantees in any other forms, or debts, liabilities or obligations in any other forms attributable to the Target Assets. The transferors did not provide or indirectly provide any loans on the Target Assets for the transferors or their related parties or any third parties.

6. The transferors have been regularly filing true and complete tax return for the Target Assets to the tax authorities or PRC. There is neither outstanding tax nor disputes as to the tax issues of the Target Assets. No notification on suspicion, inspection or penalty for tax issues issued by PRC government was received by the transferors.

7. There is no violation of laws or regulations regarding environmental protection nor investigation, penalty or other procedures from the environmental authority of PRC on the Target Assets.

8. Prior to the Delivery Date, the transferors shall assist the Target Assets in maintaining or obtaining all approvals, licenses, permissions, agreement and registrations necessary for its operation.

4. Representations and Warranties of the transferee

The transferee is lawfully incorporated and validly exists and is entitled to operate within its registered scope of business. Its business activities do not violate requirements of relevant laws and regulations.

5. Staff arrangement

1. Personnel related to the Target Assets and entered into contracts with the transferors shall follow the principle that “the personnel are to be arranged with the Target Assets” to be taken over by the transferee, with specific details to be confirmed by the Parties upon negotiation. Starting from the Delivery Date, procedures for change of subject of labour contract and other relevant changes shall be completed by the Parties. The length of employment of the aforementioned personnel shall be successive.

2. all outstanding debts such as wages, insurance and benefits and all fees, payments and compensation obligation and disputes as to personnel prior to their termination of employment with the transferors shall be borne by the transferors.

6. Creditor’s rights and debt liabilities

Starting from the Delivery Date, creditor’s rights and debt liabilities related to the Target Assets are transferred to and borne by the transferee. Relevant procedures for the above transfer of creditor’s rights and debt liabilities to the transferee shall be completed by the transferors.

7. Fees

1. Each party shall pay the respective fees borne thereby for this Assets Transfer, including but not limited to fees for negotiation, preparation, agreement entrance and performance.

2. Tax for this Assets Transfer shall be borne respectively by the Parties according to laws and regulations. Where it is not provided by the laws and regulations, such fees shall be equally divided among the Parties.

8. Information Disclosure and Confidentiality

1. The Parties shall perform relevant information disclosure obligations required by CSRC, Shanghai Stock Exchange and other laws and regulations.

2. Unless otherwise stated by applicable laws, regulations, rules or regulatory documents or requested by entitled institutions, any party shall not make any form of disclosure or announcement on all or part of the content of this agreement, or transactions or arrangements required or mentioned herein, or any other incidental issues related to this agreement and relevant transaction agreement without obtaining prior written notice of the other party.

9. Governing Law and Resolution of Disputes

1. This agreement shall be governed by and interpreted in accordance with laws of PRC.

2. Any disputes arising from the performance or interpretation of this agreement or any other disputes related hereto shall firstly be resolved by the Parties through negotiation. In case of failure to resolve such disputes via negotiation within 30 days upon receipt of one party of written notice by the other confirming such disputes, any party shall have the right to proceed to litigation in the governing People’s Court.

10. Effectiveness and Termination of Agreement

1. The Parties agree that this agreement shall become effective upon fulfilment of all the following criteria:

(a) Signatures and sealing of this agreement by legal representatives or authorized representatives of the Parties;

(b) Approval of this Assets Transfer by the board of Yankuang Group and on the shareholders meeting of Beisu Company;

(c) Approval on the shareholders meeting of the owning company of the Target Equity, and agreement on transfer of Target Equity and waiver of preferential purchasing rights by other shareholders of the owning company of the Target Equity;

(d) Approval on this Assets Transfer by the board of the transferee;

(e) Approval on this Assets Transfer by SASAC;

(f) Completion of procedures of an open offer for Target Assets and successful bidding of the Target Assets by the transferee;

(g) Approval of transfer of mining rights in Beisu and Yangcun coal mines pursuant hereto by the competent land and resources authorities.

2. This agreement may be terminated subject to written agreement upon consent of the Parties by negotiation.

3. For this Assets Transfer, the transferee shall be subject to announcement requirements and other applicable requirements in the listing rules of its listing location.

11. Liabilities of Breach

With the exception of force majeure, which refers to unforeseeable, unavoidable and insurmountable objective conditions, either party failing to perform its duties or undertaking or representation or warrant against misrepresentation under this Agreement shall be deemed as having breached this Agreement. The defaulting party shall undertake the breach liabilities towards the observant party according to the stipulations hereof and the laws, and shall compensate the observant party for all the losses (including the reasonable costs and expenses made to avoid losses) suffered by the observant party as a result of the default by the defaulting party.

12. Others

1. The Parties agreed to replace all previous contracts, agreements, intentions or statements of interpretation regarding this Assets Transfer by this agreement to form a complete agreement reflecting the consensus of the Parties.

2. Any changes to this agreement shall require consent by the Parties by negotiation and their signatures.

3. Invalidity of certain clauses hereof shall not affect the validity of other clauses.

4. The Parties may enter into separate supplementary agreements upon negotiation for any issues not stated herein shall be. The supplemental agreement shall have the same legal effect with this agreement.

5. Copies of this agreement are made in septuplicate with equal legal effects with each of the parties and relevant authorities holding one copy.

(The next page is for execution)

(This is a blank page and is only for execution by Yankuang Group Company Limited, Yankuang Group Beisu Coal Mine Company Limited and Yanzhou Coal Mining Company Limited)

Transferors:

Yankuang Group Company Limited     Legal representative   /authorized representative: /s/ Wang Xin                 Yankuang Group Beisu Coal Mine Company Limited   Legal representative   /authorized representative: /s/ Zhang Chuanwu            

Transferee:

Yanzhou Coal Mining Company Limited (Seal)

Legal representative

/authorized representative: /s/ Li Weimin            

23 April 2012

EX-8.1

EXHIBIT 8.1

LIST OF SUBSIDIARIES OF YANZHOU COAL MINING COMPANY LIMITED

As of December 31, 2012, we owned the following subsidiaries:

Name of Subsidiary	Country of incorporation/ registration and operation
Austar Coal Mine Pty, Limited	Australia
Yanmei Heze Neng Hua Company Limited	PRC
Yancoal Australia Limited	Australia
Shandong Yanmei Shipping Co., Ltd.	PRC
Yanzhou Coal Yulin Neng Hua Company Limited	PRC
Zhongyan Trade Co., Ltd.	PRC
Yanzhou Coal Shanxi Neng Hua Company Limited	PRC
Shanxi Heshun Tianchi Energy Company Limited	PRC
Shanxi Tianhao Chemical Company Limited	PRC
Shandong Hua Ju Energy Company Limited	PRC
Yanzhou Coal Ordos Neng Hua Company Limited	PRC
Inner Mongolia Yize Mining Investment Co., Ltd.	PRC
Inner Mongolia Rongxin Chemical Co., Ltd.	PRC
Inner Mongolia Daxin Industrial Gas Co., Ltd.	PRC
Inner Mongolia Xintai Coal Mining Company Limited	PRC
Yancoal International (Holding) Company Limited	Hong Kong
Yancoal International Resources Development Co., Limited	Hong Kong
Yancoal International Technology Development Co., Limited	Hong Kong
Yancoal International Trading Co., Limited	Hong Kong
Yancoal Technology (Holdings) Co., Ltd.	Australia
Yancoal Resources Limited	Australia
Shandong Coal Trading Centre Co., Ltd.	PRC
Zoucheng Yankuang Beisheng Industry & Trading Co., Ltd.	PRC
Ashton Coal Operations Pty Limited	Australia
Athena Coal Pty Ltd.	Australia
Felix NSW Pty Ltd.	Australia
Moolarben Coal Mines Pty Limited	Australia
Moolarben Coal Operations Pty Ltd.	Australia
Moolarben Coal Sales Pty Ltd.	Australia
Proserpina Coal Pty Ltd.	Australia
Syntech Holdings Pty Ltd.	Australia
Duralie Coal Pty Ltd.	Australia
Gloucester Coal Limited	Australia
Auriada Limited	Northern Ireland
Ballymoney Power Limited	Northern Ireland
Balhoil Nominees Pty Ltd.	Australia
SASE Pty Limited	Australia
CIM Mining Pty Ltd.	Australia
Donaldson Coal Holdings Ltd.	Australia
Monash Coal Holdings Pty Ltd.	Australia
CIM Stratford Pty Ltd.	Australia
CIM Services Pty Ltd.	Australia
Donaldson Coal Pty Ltd.	Australia
Agrarian Finance Pty Ltd.	Australia
Monash Coal Pty Ltd.	Australia
Newcastle Coal Company Pty Ltd.	Australia
Syntech Holdings II Pty Ltd.	Australia
Tonford Pty Ltd.	Australia
UCC Energy Pty Limited	Australia
Wesfarmers Char Pty Ltd.	Australia
Wesfarmers Premier Coal Limited	Australia
White Mining (NSW) Pty Limited	Australia
White Mining Research Pty Ltd.	Australia
White Mining Services Pty Limited	Australia

Name of Subsidiary	Country of incorporation/ registration and operation
White Mining Limited	Australia
Yancoal Canada Resources Co., Ltd.	Canada
Mountfield Properties Pty Ltd.	Australia
AMH (Chinchilla Coal) Pty Ltd.	Australia
Syntech Resources Pty Ltd.	Australia
Yancoal Luxembourg Energy Holding Co., Limited	Luxembourg
Yarrabee Coal Company Pty Ltd.	Australia
Westralian Prospectors NL	Australia
Eucla Mining NL	Australia
CIM Duralie Pty Ltd.	Australia
Duralie Coal Marketing Pty Ltd.	Australia
Gloucester (SPV) Pty Ltd	Australia
Gloucester (Sub Holdings 1) Pty Ltd.	Australia
Gloucester (Sub Holdings 2) Pty Ltd.	Australia
Donaldson Coal Finance Pty Ltd.	Australia
Stradford Coal Pty Ltd.	Australia
Straford Coal Marketing Pty Ltd.	Australia
Abakk Pty Ltd.	Australia
Primecoal International Pty Ltd.	Australia
Athena Holdings P/L	Australia
Premier Coal Holdings P/L	Australia
Tonford Holdings P/L	Australia
Wilpeena Holdings P/L	Australia
Yancoal Energy P/L	Australia
Yancoal Technology Development Pty Ltd.	Australia

EX-12.1

EXHIBIT 12.1

CERTIFICATION PURSUANT TO RULE 13a-14 OR 15d-14

OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES–OXLEY ACT OF 2002

I, ZHANG Yingmin, certify that:

1. I have reviewed this annual report on Form 20-F/A of Yanzhou Coal Mining Company Limited (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material aspects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: October 9, 2013

By:	/s/    Zhang Yingmin
Name:	Zhang Yingmin
Title:	General Manager

EX-12.2

EXHIBIT 12.2

CERTIFICATION PURSUANT TO RULE 13a-14 OR 15d-14

OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES–OXLEY ACT OF 2002

I, WU Yuxiang, certify that:

1. I have reviewed this annual report on Form 20-F/A of Yanzhou Coal Mining Company Limited (the “Company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material aspects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The company’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the Audit Committee of the Company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: October 9, 2013

By:	/s/    Wu Yuxiang
Name:	Wu Yuxiang
Title:	Chief Financial Officer

EX-13.1

EXHIBIT 13.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES–OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the annual report on Form 20-F/A, as amended by Amendment No. 1 on Form 20-F/A, of Yanzhou Coal Mining Company Limited (the “Company”) for the year ended December 31, 2012 as filed with the Securities and Exchange Commission on the date hereof, I, ZHANG Yingmin, General Manager of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The annual report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

(2) The information contained in the annual report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 9, 2013

By:	/s/    Zhang Yingmin
Name:	Zhang Yingmin
Title:	General Manager

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-13.2

EXHIBIT 13.2

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES–OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the annual report on Form 20-F/A, as amended by Amendment No. 1 on Form 20-F/A, of Yanzhou Coal Mining Company Limited (the “Company”) for the year ended December 31, 2012 as filed with the Securities and Exchange Commission on the date hereof, I, WU Yuxiang, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The annual report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

(2) The information contained in the annual report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 9, 2013

By:	/s/    Wu Yuxiang
Name:	Wu Yuxiang
Title:	Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.