As filed with Securities and Exchange Commission on December 1, 2010





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, 2009

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





LOGO

(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 Fushan South Road

Zoucheng, Shandong Province

Peoples Republic of China

(86537) 5382319

(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                  
|                                 |  | 
|H Shares, par value RMB1.00 each |  |  |  | New York Stock Exchange*                 



|* | Not for trading in the United States, but only in connection with the listing of the American Depositary Shares.
|- | ----------------------------------------------------------------------------------------------------------------





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

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, 2009, as filed with the U.S. Securities and Exchange Commission (the SEC) on June 29, 2010 (the
Original Form 20-F) is being filed solely for the purpose of amending Item 4.  Safety Control within the Original Form 20-F to supplement our disclosure with respect to our safety control program and safety performance.

Other than as set forth above, this Amendment No. 1 does not, and does not purport to, amend, update or restate the
information in any other item of the Original Form 20-F or reflect any events that have occurred after the Original Form 20-F was filed on June 29, 2010.



---



|ITEM 4. | INFORMATION ON THE COMPANY
|------- | --------------------------



|A. | History and Development of our Company
|-- | --------------------------------------

Yanzhou Coal Mining Company Limited was established on September 25, 1997 as a joint stock company with limited liability under the Company Law of the PRC (the Company Law). The
predecessor of our Company, Yanzhou Mining Bureau, was established in 1976. Upon the approval from the former State Economic and Trade Commission and the former Ministry of Coal Industry in 1996, the predecessor was incorporated under the name
Yanzhou Mining (Group) Corporation Limited and subsequently renamed Yankuang Group Corporation Limited after undergoing the reorganization in 1999.

In January 1999, we were approved by the Minister of Foreign Trade and Economic Cooperation, the predecessor of the Ministry of Commerce, to convert to a Sino-foreign joint stock company with limited
liability under the Company Law and the Sino-Foreign Joint Venture Law of the PRC.



1



---

Our contact information is:



| |  |                      |  |   |  |                                                                             
| |  | -------------------- |  | - |  | ----------------------------------------------------------------------------
| |  |    Business address |  | : |  | 298 Fushan South Road Zoucheng, Shandong Province Peoples Republic of
China
| |  |                      | 
| |  |    Telephone number |  | : |  | (86) 537 538 2319                                                           
| |  |                      | 
| |  |    Website          |  | : |  | http://www.yanzhoucoal.com.cn                                               

Establishment of Yankuang Group Finance Company Limited

At the thirteenth meeting of the third session of the Board held on August 3, 2007, the Board approved the establishment of Yankuang Group Finance Company Limited (Yankuang Finance), a
joint venture company to be formed by us with Yankuang Group and China Credit Trust Co., Ltd. The principal activities of Yankuang Finance include handling transfers and settling funds among members and accepting deposits from and lending funds to
members. The proposed registered capital of Yankuang Finance is RMB500.0 million, of which we have contributed cash of RMB125.0 million for a 25% equity interest. The CBRC approved the establishment of Yankuang Group Finance Company Limited on
November 16, 2009.

On April 20, 2010, we entered into a capital contribution agreement in relation
to the formation of Yankuang Finance pursuant to the resolutions passed at the thirteenth meeting of the third session of the Board. The final name and business scope of Yankuang Finance are subject to approval by the China Banking Regulatory
Commission (CBRC) and registration with relevant commerce authorities. As of the date of this annual report, the procedures for establishing Yankuang Finance have not been completed.

At the fourteenth meeting of the fourth session of the Board held on April 23, 2010, the Board approved the expected
connected transactions to be entered into with Yankuang Finance after its establishment and annual caps for such transactions in 2010 and 2011.

Acquisition of Felix

As approved at the first
extraordinary shareholders meeting of 2009 held on October 30, 2009, Yancoal Australia, through its wholly owned subsidiary, Austar Company, acquired the entire issued share capital in Felix for AUD3.3328 billion. On December 23,
2009, the relevant share ownership transfer was completed, and Felix was delisted from the Australian Securities Exchange (ASX) on December 30, 2009 pursuant to the relevant listing rules of the ASX. The entire acquisition cost of
Felix was financed by bank borrowings.

Felix is a company incorporated in Brisbane, Australia whose principal
activities include the exploration and production of coal. Felix holds ownership interests in a number of operational and exploratory mines located in New South Wales and Queensland, including Ashton Coal Mine (consisting of an underground coal mine
and an open-pit coal mine), Minerva Coal Mine, Yarrabee Coal Mine and Moolarben Coal Mine (consisting of an underground coal mine and an open-pit coal mine). The total coal reserves of the mines in which Felix has an interest was approximately
2,048.0 million tonnes, of which 1,420.8 million tonnes are attributable to Felix based on its equity interest in the respective coal mines. These mines hold approximately 513.2 million tonnes of the recoverable reserves, of which
392.7 million tonnes are attributable to Felix.

Felix entered into several joint venture agreements
prior to our acquisition, which triggered the respective change of control provision contained in the joint venture agreements for Ashton Coal Mine and Minerva Coal Mine. The total reserves of these two operational mines as of June 30,
2009 represented 24.6% of the total reserves of the operational mines in which Felix has an ownership interest. As of the date of this annual report, we are negotiating with two joint venture partners their rights to acquire all of the equity
interests in the relevant joint ventures pursuant to the joint venture agreements and will disclose any material progress in the negotiations.

In connection with the Felix acquisition, we undertook, among other obligations, to list Yancoal Australia on the Australian Securities Exchange by no later than the end of 2012. In addition, we undertook
to, not later than the date of the foregoing listing, reduce our economic ownership of (1) Felixs existing assets to no more than 50% and from then on to not exceed 50% and (2) Yancoal Australia to less than 70% and from then on to
not exceed 70%.

The acquisition of Felix is a critical component of our long-term development strategy. The
acquisition significantly increases our reserve base, creating a solid basis for our sustainable development. We believe that the acquisition improved our asset to debt ratio and will enhance our competitiveness by increasing our operating income
and production capacity. In addition to the synergies with our existing Australian operations, the Felix acquisition is a significant milestone in our international expansion strategy.



2



---

Acquisition of Hua Ju Energy

As approved at the second extraordinary shareholders meeting of 2008 held on December 23, 2008, we acquired 74%
of the equity interest in Hua Ju Energy from Yankuang Group for RMB593.2 million on February 18, 2009. As approved at the seventh meeting of the fourth session of the Board held on July 24, 2009, we further acquired 14.21% of the equity
interest in Hua Ju Energy from Shandong Chuangye from Investment Development Company for RMB116.3 million, as well as 6.93% of the equity interest in Hua Ju Energy from two other shareholders for a total of RMB56.7 million. On July 29, 2009, we
completed the relevant procedures for the share transfers, each of which were funded with internal sources. Following the foregoing acquisitions, our equity interest in Hua Ju Energy increased to 95.14%, while Shandong Honghe Mining Group Co., Ltd.
continues to hold a 4.86% equity interest in Hua Ju Energy. We undertook the acquisition of Hua Ju Energy to decrease our connected transactions with Yankuang Group, expedite the restructuring of our business segments to optimize resource
utilization and secure a reliable and cost-effective supply of electricity for our operations.

Establishment of Ordos
Nenghua and Acquisition of Coal Chemical Project

As approved at the working meeting of the general
managers held on December 1, 2009, we established Ordos Nenghua in the Inner Mongolia Autonomous Region on December 18, 2009 using RMB500.0 million of our internal funds. Ordos Nenghua will manage our investments in the Inner Mongolia
Autonomous Region, which includes a coal mining business, a coal chemical business and a coal power project. On April 16, 2010, Ordos Nenghua acquired the entire equity interest in Inner Mongolia Rongxin Chemical Co., Ltd., Inner Mongolia Daxin
Industrial Gas Co., Ltd. and Inner Mongolia Yize Mining Investment Co., Ltd. from Kingboard Chemical Holdings Limited for RMB190.0 million and intends to establish a 600,000 tonne methanol project following these acquisitions.

The establishment of Ordos Nenghua, and the acquisitions it has made, enable us to capitalize on opportunities to develop
coal resources in the Inner Mongolia Autonomous Region, which will enhance the sustainability of our development and core competitiveness.



3



---

Increasing Investment in Heze Nenghua

In 2007, we contributed RMB876.0 million to Heze Nenghua to fund the construction of Zhaolou Coal Mine, which commenced
operations in March 2009. Pursuant to the resolution and as approved in the eleventh meeting of the fourth session of the Board held on October 27, 2009, we increased the registered capital of Heze Nenghua again by RMB1,500.0 million, which
further increased our ownership interest to 98.33%. The registration of the capital increase had been completed as of the date of this annual report.

Establishment of Shaanxi Yushuwan Coal Mine Company Limited

We entered into a joint venture agreement in 2006 to set up Yushuwan Coal Mine Company with Chia Tai Energy & Chemical Company Limited (Chia Tai Company) and Yushen Coal Company
Limited (Yushen Company). The registered capital of Yushuwan Coal Mine Company is RMB480.0 million, of which the Company, Chai Tai Company and Yushen Company is expected to contribute RMB196.8 million, RMB192.0 million and RMB91.2
million, respectively, for a 41%, 40% and 19% equity interest in Yushuwan Coal Mine Company. Yushuwan Coal Mine Company will primarily be engaged in the construction and operation of Yushuwan Coal Mine in Shaanxi Province. We have made a deposit of
RMB118.0 million for this joint venture. As of the date of this annual report, the application for the establishment of Yushuwan Coal Mine Company was still pending regulatory review.

Capital Expenditures

Our principal source of cash in 2009 was bank borrowings and cash generated from our operating activities. Our capital expenditures in 2009 were primarily for the acquisition of Felix, investments to
enhance the facilities of the Six Coal Mines and investments in Heze Nenghua.

The following table sets forth
a summary of our capital expenditures in the periods indicated:



|                                      |  |                         |         |  |      |  |         |      |  |  |          |  |  |  |         | 
|------------------------------------- |  | ----------------------- | ------- |  | ---- |  | ------- | ---- |  |  | -------- |  |  |  | ------- | 
|                                      |  | Year Ended December 31, |        
|                                      |  | 2007                    |         |  | 2008 |  |         | 2009 |  |  | 2009     | 
|                                      |  | RMB                     |         |  | RMB  |  |         | RMB  |  |  | US$      | 
|                                      |  | (in millions)           |        
|                                      | 
|Capital Expenditure                   |  |                         |         | 
|                                      |  |                         |         | 
|Coal mining                           |  |                         | 1,234.2 |  |      |  | 1,925.3 |      |  |  | 24,086.5 |  |  |  | 3,528.7 | 
|                                      |  |                         |         | 
|Coal railway transportation           |  |                         | 30.4    |  |      |  | 29.2    |      |  |  | 11.4     |  |  |  | 1.7     | 
|                                      |  |                         |         | 
|Methanol, electricity and heat supply |  |                         |        |  |      |  | 925.1   |      |  |  | 1,220.0  |  |  |  | 178.7   | 
|                                      |  |                         |         | 
|Unallocated                           |  |                         | 1,704.4 |  |      |  |        |      |  |  |         |  |  |  |        | 
|                                      |  |                         |         | 
|Corporate                             |  |                         | 24.1    |  |      |  | 2.1     |      |  |  | 7.0      |  |  |  | 1.0     | 
|                                      |  |                         |         |  |      |  |         |      |  |  |          |  |  |  |         | 
|                                      |  |                         |         | 
|Total                                 |  |                         | 2,993.1 |  |      |  | 2,881.7 |      |  |  | 25,324.9 |  |  |  | 3,710.1 | 
|                                      |  |                         |         |  |      |  |         |      |  |  |          |  |  |  |         | 

Our planned capital expenditure for 2010 is approximately RMB4,085.2 million. For more
information, see Item 5. Operating and Financial Review and Prospects  B. Liquidity and Capital Resources  Capital Expenditures.

Potential Takeovers by Third Parties

There were no
indications of any public takeover offers by third parties in respect of our common shares in 2009.



|B. | Business Overview
|-- | -----------------

Yanzhou Coal is one of the largest coal producers in China with a rapidly growing coal mining operations in Australia. We primarily engage in the mining, preparation and sale of coal as well as the
railway transportation of coal. In recent years, we have expanded our operations to include the production of coal chemicals and generation of electricity and heat.



4



---

The Company directly owns and operates six coal mines: Nantun,
Xinglongzhuang, Baodian, Dongtan, Jining II and Jining III (collectively, the Six Coal Mines), which produce a substantial majority of our total coal output. As of December 31, 2009, the Six Coal Mines had an estimated collective
in-place proven and probable reserve base of approximately 1,831.2 million tonnes. Through our subsidiaries, we have interests in a number of coal mines in China and Australia. Yancoal Australia operates Austar Coal Mine, Yarrabee Coal Mine,
Minerva Coal Mine, Ashton Coal Mine and Moolarben Coal Mine, which collectively holds approximately 557.8 million tonnes of recoverable coal reserves. Shanxi Nenghua operates Tianchi Coal Mine, which holds 27.8 million tonnes of
recoverable reserves, and Heze Nenghua operates Zhaolou Coal Mine, which holds 105.8 million tonnes of recoverable reserves.

Our main product of coal business are thermal coal, semi-hard coking coal, semi-soft coking coal, PCI coal and1/3 coking coal which are sold to power plants, metallurgical mills, chemical manufacturers, construction material
manufacturers and fuel trading companies in Eastern China and countries such as Japan and Korea.

Coal Business

We produce premium quality, low sulfur coal that is suitable for a wide range of applications. Our
products consist principally of thermal coal and semi-soft coking coal and semi-hard coking coal, which are suitable for power generation and metallurgical production, respectively. The following table sets forth the specifications and principal
applications of our coal products.



|                      |  |                |         |  |                                  |                     |                       |                         |        |  |     |                        |  |                                                                  
|--------------------- |  | -------------- | ------- |  | -------------------------------- | ------------------- | --------------------- | ----------------------- | ------ |  | --- | ---------------------- |  | -----------------------------------------------------------------
|                      |  | Sulfur Content |         |  | Range of and
Average Ash
Content |                     | Calorific Value       |                         | Washed |  |     | Principal
Applications
|                      |  | %              |         |  | %                                |                     | (megajoule/ kilogram) |                         |        |  |     |                       
|The Company           |  |                |         |  |                                  |                     |                       |                         |        |  |     |                        |  |                                                                  
|No. 1 clean coal      |  |                | 0.44    |  |                                  | 7-8 average 7.79    |                       | 26-28 average 27.84     |        |  | Yes |                        |  | High quality metallurgical production                            
|No. 2 clean coal      |  |                | 0.49    |  |                                  | 8-9 average 8.57    |                       | 26-28 average 27.57     |        |  | Yes |                        |  | Metallurgical production, construction, liquidize coal production
|No. 3 clean coal      |  |                | 0.53    |  |                                  | 10-11 average 10.43 |                       | 26.3-26.9 average 26.63 |        |  | Yes |                        |  | Electricity generation and coal chemical production              
|Lump coal             |  |                | 0.48    |  |                                  | 9-14 average 9.81   |                       | 25-28 average 27.86     |        |  | Yes |                        |  | Construction, power generation, coal for oven application        
|Screened raw coal     |  |                | 0.6     |  |                                  | 18-27 average 25.7  |                       | 20-23.5 average 21.36   |        |  | No  |                        |  | Power generation                                                 
|Mixed coal            |  |                | 0.6     |  |                                  | 22-30 average 29.3  |                       | 18-22 average 20.1      |        |  | Yes |                        |  | Power generation                                                 
|Shanxi Nenghua        |  |                |         |  |                                  |                     |                       |                         |        |  |     |                        |  |                                                                  
|Tianchi raw coal      |  |                | 1.06    |  |                                  | 27-30, average 29   |                       | 21-23, average 22.05    |        |  | No  |                        |  | Power generation                                                 
|Heze Nenghua          |  |                |         |  |                                  |                     |                       |                         |        |  |     |                        |  |                                                                  
|No. 2 clean coal      |  |                | 0.49    |  |                                  | 8-9, average 8.43   |                       | 29.85                   |        |  | Yes |                        |  | Metallurgical production, construction, coal slurry              
|Mixed coal and others |  |                | 0.51    |  |                                  | average 25.69       |                       | average 22.25           |        |  | Yes |                        |  | 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                                                 



5



---

In 2009, we produced approximately 36.3 million tonnes of raw coal,
including 33.4 million tonnes by the Company, 1.9 million tonnes by Yancoal Australia, 1.0 million tonnes by Shanxi Nenghua and 40,000 tonnes by Heze Nenghua.

We sold 38.0 million tonnes of coal in 2009, which consisted of 1.0 million tonnes of internal sales to Hua Ju
Energy and 37.0 million tonnes of external sales, consisting of 2.1 million tonnes that we had purchased from other coal producers for resale. Our total coal sales volume in 2009 increased approximately 455,000 tonnes, or 1.2%, from 2008.
We sold 36.0 million tonnes of self-produced coal, representing an increase of approximately 970,000 tonnes or 2.8%, compared to 2008. The Company sold 33.3 million tonnes of coal, representing an increase of 930,000 tonnes, or 2.9%
from 2008. Shanxi Nenghua sold 990,000 tonnes of raw coal, representing decrease of approximately 110,000 tonnes or 10.3%, compared to 2008. Yancoal Australia sold 1.6 million tonnes of coal, representing an increase of approximately 140,000
tonnes or 9.6%, compared to 2008.

The following table sets forth our principal coal products by sales volume
and net sales of coal in the indicated periods.



|                          |  |                             |        |  |                           |  |          |                             |  |  |                         |  |  |                             |          |  |                           |  |        |  |  |  |          | 
|------------------------- |  | --------------------------- | ------ |  | ------------------------- |  | -------- | --------------------------- |  |  | ----------------------- |  |  | --------------------------- | -------- |  | ------------------------- |  | ------ |  |  |  | -------- | 
|                          |  | Year Ended December 31,     |       
|                          |  | 2007                        |        |  | 2008                      |  |          | 2009                        | 
|                          |  | Sales Volume  (000 tonnes) |        |  | Net Sales(RMB    million) |  |          | Sales Volume  (000 tonnes) |  |  | Net Sales(RMB  million) |  |  | Sales Volume  (000 tonnes) |          |  | Net Sales(RMB    million) | 
|                          |  |                             |        |  |                           | 
|The Company               |  |                             | 32,490 |  |                           |  | 13,451.7 |                             |  |  | 32,402                  |  |  |                             | 20.337.9 |  |                           |  | 33,330 |  |  |  | 16,797.7 | 
|                          |  |                             |        |  |                           | 
|No. 1 clean coal          |  |                             | 713    |  |                           |  | 423.4    |                             |  |  | 363                     |  |  |                             | 388.3    |  |                           |  | 694    |  |  |  | 482.7    | 
|                          |  |                             |        |  |                           | 
|No. 2 clean coal          |  |                             | 7,260  |  |                           |  | 4,251.4  |                             |  |  | 7,431                   |  |  |                             | 7,692.0  |  |                           |  | 8,362  |  |  |  | 6,304.0  | 
|                          |  |                             |        |  |                           | 
|No. 3 clean coal          |  |                             | 8,616  |  |                           |  | 3,931.5  |                             |  |  | 2,916                   |  |  |                             | 2,513.2  |  |                           |  | 1,717  |  |  |  | 1,100.2  | 
|                          |  |                             |        |  |                           | 
|Lump coal                 |  |                             | 693    |  |                           |  | 390.7    |                             |  |  | 1,161                   |  |  |                             | 1,089.2  |  |                           |  | 1,402  |  |  |  | 931.1    | 
|                          |  |                             |        |  |                           | 
|Screened raw coal         |  |                             | 11,357 |  |                           |  | 3,848.5  |                             |  |  | 17,934                  |  |  |                             | 8,281.9  |  |                           |  | 17,100 |  |  |  | 7,026.5  | 
|                          |  |                             |        |  |                           | 
|Mixed coal and others     |  |                             | 3,851  |  |                           |  | 606.2    |                             |  |  | 2,597                   |  |  |                             | 373.3    |  |                           |  | 4,055  |  |  |  | 953.2    | 
|                          |  |                             |        |  |                           | 
|Shanxi Nenghua            |  |                             | 1,193  |  |                           |  | 243.5    |                             |  |  | 1,099                   |  |  |                             | 294.0    |  |                           |  | 986    |  |  |  | 285.0    | 
|                          |  |                             |        |  |                           | 
|Screened raw coal         |  |                             | 1,193  |  |                           |  | 243.5    |                             |  |  | 1,099                   |  |  |                             | 294.0    |  |                           |  | 986    |  |  |  | 285.0    | 
|                          |  |                             |        |  |                           | 
|Heze Nenghua              |  |                             |       |  |                           |  |         |                             |  |  |                        |  |  |                             |         |  |                           |  | 16     |  |  |  | 8.1      | 
|                          |  |                             |        |  |                           | 
|No. 2 clean coal          |  |                             |       |  |                           |  |         |                             |  |  |                        |  |  |                             |         |  |                           |  | 5      |  |  |  | 4.9      | 
|                          |  |                             |        |  |                           | 
|Screened raw coal         |  |                             |       |  |                           |  |         |                             |  |  |                        |  |  |                             |         |  |                           |  | 2      |  |  |  | 1.1      | 
|                          |  |                             |        |  |                           | 
|Mixed coal and others     |  |                             |       |  |                           |  |         |                             |  |  |                        |  |  |                             |         |  |                           |  | 9      |  |  |  | 2.1      | 
|                          |  |                             |        |  |                           | 
|Yancoal Australia         |  |                             | 1,423  |  |                           |  | 661.7    |                             |  |  | 1,484                   |  |  |                             | 1,527.9  |  |                           |  | 1,627  |  |  |  | 1,087.0  | 
|                          |  |                             |        |  |                           | 
|Semi-hard coking coal     |  |                             | 1,423  |  |                           |  | 661.7    |                             |  |  | 1,484                   |  |  |                             | 1,527.9  |  |                           |  | 1,627  |  |  |  | 1,087.0  | 
|                          |  |                             |        |  |                           | 
|Externally purchased coal |  |                             |       |  |                           |  |         |                             |  |  | 2,576.7                 |  |  |                             | 1,889.0  |  |                           |  | 2,058  |  |  |  | 1,112.5  | 
|                          |  |                             |        |  |                           |  |          |                             |  |  |                         |  |  |                             |          |  |                           |  |        |  |  |  |          | 
|                          |  |                             |        |  |                           | 
|Total                     |  |                             | 35,106 |  |                           |  | 14,356.9 |                             |  |  | 37,562                  |  |  |                             | 24,048.8 |  |                           |  | 38,017 |  |  |  | 19,290.4 | 
|                          |  |                             |        |  |                           |  |          |                             |  |  |                         |  |  |                             |          |  |                           |  |        |  |  |  |          | 



|(1) | Net sales of coal represent our invoice amount of coal sales with deductions for returns, discounts, sales taxes, port fees and various
miscellaneous fees relating to a sale, as well as transportation costs if the invoice amount includes transportation costs charged to customers.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



6



---

Sales and Marketing

A significant portion of our domestic sales in 2009 was made pursuant to sales contracts, while the remainder of our coal
sales are based on purchase orders placed by our customers from time to time. Our customers may sign letters of intent to make purchases in the short term. The contract price in sales contracts are the result of market-based negotiations between the
contracting parties. These sales contracts and letters of intent generally specify the quantity and delivery schedule of the coal to be purchased, generally for a term not exceeding one year. The contract prices for letters of intent are generally
determined at the time of sale to reflect prevailing market prices.

We have a flexible credit policy, and
credit terms may vary from customer to customer depending on each customers creditworthiness and the credit amount involved. We may allow open accounts, require acceptance bills or require cash on delivery. We rely on data from our ERP 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. A majority of our domestic coal sales is made to power plants, metallurgical mills,
chemical manufacturers and construction material manufacturers with whom we have established long-standing and stable relationships.



7



---

Sales taxes include resource taxes imposed by Shandong and Shanxi Provinces.
The applicable resource tax rate is RMB3.6 per tonne for our coal mines located in Shandong Province and RMB3.2 per tonne for our coal mines in Shanxi Province. These taxes are paid to the local tax bureau. The following table sets forth a breakdown
of our net sales of coal by industry for the indicated periods:



|                       |  |                         |          |  |               |  |       |               |  |  |               |  |  |               |       |  |               |  |          |  |  |  |       | 
|---------------------- |  | ----------------------- | -------- |  | ------------- |  | ----- | ------------- |  |  | ------------- |  |  | ------------- | ----- |  | ------------- |  | -------- |  |  |  | ----- | 
|                       |  | Year Ended December 31, |         
|                       |  | 2007                    |          |  | 2008          |  |       | 2009          | 
|                       |  | NetSales                |          |  | % of NetSales |  |       | NetSales      |  |  | % of NetSales |  |  | NetSales      |       |  | % of NetSales | 
|                       |  | (RMB million)           |          |  |               |  |       | (RMB million) |  |  |               |  |  | (RMB million) |       |  |               | 
|                       |  |                         |          |  |               | 
|Power plants           |  |                         | 3,846.6  |  |               |  | 26.8  |               |  |  | 7,333.4       |  |  |               | 30.5  |  |               |  | 5,613.0  |  |  |  | 29.1  | 
|                       |  |                         |          |  |               | 
|Metallurgical mills    |  |                         | 1,645.8  |  |               |  | 11.5  |               |  |  | 3,369.4       |  |  |               | 14.0  |  |               |  | 1,976.6  |  |  |  | 10.2  | 
|                       |  |                         |          |  |               | 
|Chemical manufacturers |  |                         | 4,158.5  |  |               |  | 29.0  |               |  |  | 4,459.7       |  |  |               | 18.5  |  |               |  | 2,656.7  |  |  |  | 13.8  | 
|                       |  |                         |          |  |               | 
|Others                 |  |                         | 4,706.1  |  |               |  | 32.8  |               |  |  | 8,886.3       |  |  |               | 37.0  |  |               |  | 9,044.1  |  |  |  | 46.9  | 
|                       |  |                         |          |  |               |  |       |               |  |  |               |  |  |               |       |  |               |  |          |  |  |  |       | 
|                       |  |                         |          |  |               | 
|Total                  |  |                         | 14,356.9 |  |               |  | 100.0 |               |  |  | 24,048.8      |  |  |               | 100.0 |  |               |  | 19,290.4 |  |  |  | 100.0 | 
|                       |  |                         |          |  |               |  |       |               |  |  |               |  |  |               |       |  |               |  |          |  |  |  |       | 



|(1) | Net sales of coal represent our invoice amount of coal sales with deductions for returns, discounts, sales taxes, port fees and various
miscellaneous fees relating to a sale, as well as transportation costs if the invoice amount includes transportation costs charged to customers.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our domestic coal sales are concentrated in Eastern China, particularly in Shandong Province. The following table sets
forth a breakdown of our net sales of coal by geographical region for the indicated periods:



|               |  |                         |          |  |               |  |       |               |  |  |               |  |  |               |       |  |               |  |          |  |  |  |       | 
|-------------- |  | ----------------------- | -------- |  | ------------- |  | ----- | ------------- |  |  | ------------- |  |  | ------------- | ----- |  | ------------- |  | -------- |  |  |  | ----- | 
|               |  | Year Ended December 31, |         
|               |  | 2007                    |          |  | 2008          |  |       | 2009          |  |  |               | 
|               |  | Net Sales               |          |  | % of NetSales |  |       | Net Sales     |  |  | % of NetSales |  |  | Net Sales     |       |  | % of NetSales | 
|               |  | (RMB million)           |          |  |               |  |       | (RMB million) |  |  |               |  |  | (RMB million) |       |  |               | 
|               |  |                         |          |  |               | 
|China          |  |                         | 13,075.1 |  |               |  | 91.1  |               |  |  | 22,332.5      |  |  |               | 92.9  |  |               |  | 18,345.4 |  |  |  | 95.1  | 
|               |  |                         |          |  |               | 
|Eastern China  |  |                         | 12,069.5 |  |               |  | 84.1  |               |  |  | 19,283.2      |  |  |               | 80.2  |  |               |  | 14,241.5 |  |  |  | 73.8  | 
|               |  |                         |          |  |               | 
|Southern China |  |                         | 803.7    |  |               |  | 5.6   |               |  |  | 1,075.0       |  |  |               | 4.5   |  |               |  | 332.9    |  |  |  | 1.7   | 
|               |  |                         |          |  |               | 
|Northern China |  |                         | 196.4    |  |               |  | 1.4   |               |  |  | 490.0         |  |  |               | 2.0   |  |               |  | 251.5    |  |  |  | 1.3   | 
|               |  |                         |          |  |               | 
|Other regions  |  |                         | 5.4      |  |               |  | 0.04  |               |  |  | 1,484.3       |  |  |               | 6.2   |  |               |  | 3,519.5  |  |  |  | 18.2  | 
|               |  |                         |          |  |               | 
|Japan          |  |                         | 941.0    |  |               |  | 6.6   |               |  |  | 1,350.3       |  |  |               | 5.6   |  |               |  | 447.1    |  |  |  | 2.3   | 
|               |  |                         |          |  |               | 
|Korea          |  |                         | 218.7    |  |               |  | 1.5   |               |  |  | 295.6         |  |  |               | 1.2   |  |               |  | 210.8    |  |  |  | 1.1   | 
|               |  |                         |          |  |               | 
|Australia      |  |                         | 20.6     |  |               |  | 0.1   |               |  |  | 15.3          |  |  |               | 0.1   |  |               |  | 40.9     |  |  |  | 0.2   | 
|               |  |                         |          |  |               | 
|Others         |  |                         | 101.5    |  |               |  | 0.7   |               |  |  | 55.1          |  |  |               | 0.2   |  |               |  | 246.2    |  |  |  | 1.3   | 
|               |  |                         |          |  |               |  |       |               |  |  |               |  |  |               |       |  |               |  |          |  |  |  |       | 
|               |  |                         |          |  |               | 
|Total          |  |                         | 14,356.9 |  |               |  | 100.0 |               |  |  | 24,048.8      |  |  |               | 100.0 |  |               |  | 19,290.4 |  |  |  | 100.0 | 
|               |  |                         |          |  |               |  |       |               |  |  |               |  |  |               |       |  |               |  |          |  |  |  |       | 



|(1) | Net sales of coal represent our invoice amount of coal sales with deductions for returns, discounts, sales taxes, port fees and various
miscellaneous fees relating to a sale, as well as transportation costs if the invoice amount includes transportation costs charged to customers.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



8



---

As of December 31, 2009, our major customers are Huadian Power
International Corporation Limited, Yankuang Meihua Gongxiao Co., Ltd., Baoshan Iron & Steel Co., Ltd., Linyi Yehua Coking Co., Ltd., Yankuang Group Logistics Co., Ltd., among which Huadian International was our largest customer. In 2007,
2008 and 2009, we provided 5.4 million, 8.8 million and 7.5 million tonnes of coal respectively to Huadian International, which represented 15.5%, 23.3% and 19.8% of our sales volume, respectively. A substantial portion of Huadian
Internationals coal purchases was, in turn, supplied to Zouxian Power Plant.

As of the date of this
annual report, we have entered into domestic sales contracts and letters of intent to provide a total of 40.3 million tonnes of coal, including contracts to sell 10.0 million tonnes of coal at a tax-inclusive price of RMB578.26 per tonne,
representing an increase of RMB86.75 per tonne, or 17.6%, from our average selling price in 2009. The sales price under the letters of intent will be determined at the time of sale. Yancoal Australia has entered into agreements to sell
8.12 million tonnes of coal in 2010.

Our Companys export sales as a percentage of our total net
sales of coal decreased from 0.8% in 2008 to 0.2% in 2009. We have decreased our export sales in recent years because market conditions have made domestic sales more profitable than export sales. Our major overseas markets include Japan, Korea,
Australia, the United States and Switzerland. Even though we conduct all of our export sales from the PRC through export agents, we maintain close relationships with our overseas customers.

Our sales and marketing department conducts routine customer visits and customer surveys to keep abreast on market
developments, maintain customer relationships and continually improve our business. In addition, we regularly collect market information about Eastern China and other regions, which is used by the entire Company for business planning and execution
purposes.

Pricing

The pricing for our coal products is generally based on negotiation 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. See Item 3. Key Information  D. Risk Factors  Our products may be subject to governmental price control measures, which may
adversely affect our profitability.

When we price our coal products, we consider the prevailing prices
in the relevant local coal markets (inclusive of transportation costs), the grade and quality of the coal being sold and our relationship with the purchaser. Customers generally bear the cost of transportation in domestic coal sales. Our sales
and marketing department has access to domestic and international market information through our data center, enabling us to closely monitor pricing developments in our principal markets. The price on export sales from China are determined
collectively by the involved exports sales company, our end-user customer and us.

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 primarily use railways and the highways to transport coal and, to a lesser extent, we also ship our coal on 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 our largest end-user customer, Zouxian Power Plant.

We also
transport coal on the national railway system to ports such as, Rizhao, Qingdao and Lianyungang, from which we ship coal 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. In Shanxi Province, we rely on the Yangshe Railway, which intersects the Tianchi Coal Mine, and trucking to deliver coal to Hebei Province, Shandong Province and other nearby areas.

We plan to construct a privately operated railway to connect Zhaolou Coal Mine with the national railway
system. Before the completion of such plan, we will rely on trucking to deliver coal from Zhaolou Coal Mine to the national railway and certain customers.

To transport Yancoal Australias coal products to Newcastle Port and Gladstone Port in Australia, we use Australias state railway network and private railway networks.

Mining Process

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



9



---

Domestic Underground Mining Operations. Our domestic 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 is 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. When the use of headers is not feasible, we use explosives to excavate tunnels. Coal extracted during tunneling
is carried by conveyor belts to our underground storage bunkers to be stored together with other extracted coal. Rock and other minerals produced during the excavation of roadways are separated and transported out of the mine.

The extraction process is completed 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. For coal seams with an thickness up to 4.5 meters, we use a fully mechanized method to extract coal. For coal seams that are thicker than 4.5
meters, we add a caving method to the fully mechanized longwall mining operation, whereby coal that is beyond the reach of our shearers collapse in a controlled manner onto our conveyers as the coal support underneath it is removed by our shearers.
Coal is then transported away from a longwall work-face by a series of conveyors positioned in front of and behind the system of roof supports. Roof supports provide continuous support for and protection along the length of the long-wall work-face
and they also move the conveyors and shearers forward after each pass of the shearers along the work-face using horizontal hydraulic rams positioned at the base of each support. Our hydraulic roof supports are manufactured in China.

The shaft hoist system equipment that we use at most of our mines is 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. Each of the Six Coal Mines and Austar Coal Mine has a coal preparation plant. In general, the coal-washing conducted in our coal preparation plants include a water bed washing and separation process by jig machines, a sink-and-float
separation process and a final floating separation process. Most of the equipment used in our coal preparation plants is automated, enabling us to control the ash content and grade of our processed coal. The aggregate recovery rate of our coal
preparation plants was 78.4%, 66.6% and 69.1% in 2007, 2008 and 2009, respectively.

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

Materials, Water and Energy Supply

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 primarily
procure steel principally from Jinan Iron & Steel Co. Ltd., Laiwu Iron & Steel Group Corp. Ltd. and Shandong Shiheng Special Steel Group Co. Ltd. and cement from Shandong Lucheng Cement Company, Ltd. and Taishan Cement Works. We
procure water primarily from Yankuang Group pursuant to the Materials Supply Agreement and its supplemental agreements, and to a lesser extent, from local water companies. The price of materials is set at market rates or determined through
negotiation. 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 and, therefore, we do not foresee any difficulty in obtaining adequate supplies.

We use significant amounts of electricity in our operations. Electricity prices in China are regulated by the government. Even though we have not experienced any material disruptions to our electricity
supply in the past three years, we acquired Hua Ju Energy to secure a stable supply of energy for our Six Coal Mines and to reduce our electricity costs. In 2009, Hua Ju Energy supplied 556.0 million kWh of electricity to our operations.

Quality Control

We have implemented a quality assurance program at each of our PRC coal mines pursuant to control quality throughout the production and transportation of our coal. 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.



10



---

Each of Nantun Coal Mine, Xinglongzhuang Coal Mine, Baodian Coal Mine,
Dongtan Coal Mine, Jining II Coal Mine and Jining III Coal Mine has obtained ISO 9002 quality and ISO 14000 environmental management certification. Tianchi Coal Mine has obtained ISO 9000 quality and ISO 14000 environmental management certification,
and Zhaolou Coal Mine has obtained ISO 9001 quality and ISO 14001 environmental management certification.

Yancoal Australia has hired 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 suggest quality improvement measures.

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 Coal Law and the National Mining Safety Law in China. In Australia, our operations in New South
Wales is compliant with the Coal Mine Health and Safety Act 2002 (NSW) and Occupational Health and Safety Act 2000 (NSW) and our operations in Queensland is compliant with the Coal Mining Safety and Health Act 1999 (Qld).

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. Moreover, 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 0.892 fatalities per million tonnes of coal produced in 2009 according to the State Administration of Work Safety of the PRC. In 2009, we produced 36.3 million tonnes of coal and had two serious work
injuries reported in our PRC operations.

Following our acquisition of Felix in December 2009, we have been
continuously reviewing and evaluating its safety control and performance. With respect to our Australian operations (inclusive of Felix) in 2009, our lost time injury frequency rate (LTIFR), measured as the number of lost time injuries
per million man-hours worked, was 9.0 for open cut mines and 14.7 for underground mines, compared to Australias industry LTIFR of 8.9 and 23.7, respectively. We had no fatalities in our Australian operations in 2009.

Environmental Protection

We are subject to PRC environmental protection laws and regulations which impose fees for the discharge of waste material and fine heavy polluters. 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.

According to the Provision of Labor and Services
Supply Agreement that we entered into with Yankuang Group, it will provide us environmental protection services. In 2009, we paid Yankuang Group a total of RMB41.7 million for such services to reduce the effects of our operations on the environment.

Competition

The development of the PRC coal industry is influenced by the large number of small scale enterprises and the wide geographical distribution of coal reserves. However, there are relatively few large-scale
coal production enterprises in China.

Our primary market, the PRC domestic coal market is characterized by
numerous small-scale coal suppliers. The domestic coal market is segmented principally by geographical region, as a result of the wide geographical distribution of coal reserves. However, there are a number of large-scale coal production enterprises
that dominate the domestic market. We compete principally on the basis of the availability and cost of transportation, coal quality and reliability of deliveries.

Our domestic competitors primarily include a number of coal mines located in Shanxi Province, Shaanxi Province and the
Inner Mongolia Autonomous Region. 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 end-user customers
located in Eastern China. In addition to coal mines located in Shanxi Province, Shaanxi Province and the Inner Mongolia Autonomous Region, we also compete to a certain extent with local mines located close to our customers.

We export coal mainly to Japan, Korea, Australia, the United States and Switzerland. With respect to export sales, we
compete with certain major overseas coal mining companies, most of which are located in Australia and Indonesia.

Seasonality

Our coal business is not affected by seasonality.



11



---

Railway Transportation Business

We own and operate a railway transportation network that connects our coal mines to the national railway system and
Zouxian Power Plant. As of the date of this annual report, our railway network spanned a total length of 204 kilometers. Our railway network provides us a greater degree of control over a major mode of transportation for our key product and the
synergies of having a consolidated coal operation that comprises coal production, sales and transportation.

In addition to transporting coal within the Group, we offer railway transportation services to customers, including
Yankuang Group. In 2009, we transported 19.9 million tonnes of coal on our railway network, representing an increase of 0.7 million tonnes, or 3.7%, from 2008. We generated RMB258.4 million from railway transportation services in 2009,
representing an increase of RMB11.2 million, or 4.5%, from 2008 due to an increase in the volume of goods transported.

Our Company has obtained ISO 9001 quality accreditation, ISO 14001 environmental management certification and GB/T19022-2003 management certification for the operation of our railway network.

Our railway network connects us to the national railway system, such as Jinghu railway and Yanshi railway, and provides
us access to Zouxian Power Plant. We use our railway network to provide railway transportation services for our own internal use as well as to Yankuang Group and other customers. We do not face significant competition from other railway operators.
However, we compete with other ground transportation services that serve the same region as 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. In 2009, we produced 199,000 tonnes of methanol and sold 190,000 tonnes. Yulin Nenghua produced 190,000 tonnes after commencing commercial production in August 2009 and sold 178,000 tonnes in 2009.
Tianhao Chemicals, which was unable to maintain regular operations in 2009 because of a continuing shortage in a key raw material, produced 9,000 tonnes of methanol and sold 12,000 tonnes in 2009, including methanol from inventory. In 2009, our
total revenue from our coal chemical business was RMB258.7 million.

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, predominately to chemical producers in Northern and Eastern China and methanol distributors, relying 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.

Production Process

Yulin Nenghua. We use coal as raw material to manufacture methanol at our Yulin Nenghua facility. 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.

Tianhao Chemicals. We use coke oven waste gas as the primary raw material to manufacture methanol at our Tianhao
Chemicals facility. We reduce the sulphur contained in coke oven waste gas and then convert the treated gas into synthesis gas. The synthesis gas is further processed 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 Tianhao Chemicals is dependent on receiving coke oven waste gas from one supplier whose facility is
connected to Tianhao Chemicals plant through transmission pipelines. This supplier has not been able to provide a steady supply of coke oven waste gas due to poor market conditions that have affected the suppliers operations, which in
turn, has severely interrupted production at Tianhao Chemicals. As of the date of this annual report, we have not been able to find an alternative supplier.



12



---

Production at Yulin Nenghua is reliant on thermal coal, which it currently
sourced from local coal mines as our adjoining Yushuwan Coal Mine has not been registered yet. We plan to source thermal coal internally once Yushuwan Coal Mine 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 have 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 Safety 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 we further expand our coal chemical operations with the construction of Ordos Nenghuas
methanol plant.

Seasonality

Our coal chemical operations are not affected by seasonality.

Electric
Power and Heat Supply Business

We own and operate eight power plants, which generate electricity for
internal use and external sales. In 2009, we generated a total of 1,201.2 million kWh of electricity, of which we sold 562.3 million kWh externally and generated RMB185.6 million in revenue. The power plants operated by Hua Ju Energy,
Tianhao Chemicals and Yulin Nenghua generated 1,051.2 million kWh, 102.9 million kWh and 47.2 million kWh, respectively. Hua Ju energy made external sales of 412.2 million kWh.

We held 95.14% of the equity interest in Hua Ju Energy as of December 31, 2009. 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 has an installed capacity of 114 megawatt and the power plants at Yulin Nenghua and Tianhao
Chemicals have an aggregate installed capacity of 84 megawatt.

We commenced heat supply operations, which
consist of the production and sale of heat supply following our acquisition of Hua Ju Energy. In 2009, Hua Ju Energy generated 1.17 million steam tonnes of heat energy. Although the substantial majority of heat energy produced by Hua Ju Energy
is intended to be consumed internally by our coal mines, we generated net sale of RMB13.3 million from selling 0.14 million steam tonnes of heat externally.

Sales and Marketing

The electric power generated by our
power plants is mainly intended for our own use and, to a lesser extent, sold to other end-users through power grids. We consume most of the heat generated by our power plants and to the extent we have extra capacity, sell to Yankuang Group.

Pricing

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

Production Process

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



13



---

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, through the conveyers belt and fuel feeding device, are fed to a CFB boiler 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 via the heat supply
system provided to the mining operations.

In both 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. Tianhao Chemicals and Yulin Nenghua currently source thermal coal from local coal mines.

Quality
Control

Yulin Nenghua obtained AAA measurement management system, ISO 9001 quality accreditation and ISO
14001 environmental management certification in November 2009. Hua Ju Energy has obtained ISO 9001 quality accreditation and ISO 14001 environmental management certification since November 2003. We perform regular inspections and maintenance on our
power plants.

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 is affected by seasonality and experiences higher demand during winter.

Regulatory Oversight of Our Group

Coal Industry  PRC Regulatory Matters

To establish a
coal mining enterprise under the Coal Law of the PRC (the Coal 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 Ministry of Land and Resources. 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 coal that they produce. For establishment of 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
administrative department of industry and commerce.

Mining activities in the PRC are also subject to the
Mineral Resources Law of the Peoples Republic of China (the Mineral Resources Law). 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 Coal Law, the Mineral Resources Law and other relevant regulations.

We are principally subject to the supervision and regulation by the following agencies of the PRC government:



| |  |  | the State Council, the highest level of the executive branch, which is responsible for the examination and approval of major investment projects
specified in the Catalogue of Investment Projects released by the PRC government in 2004;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



14



---



| |  |  | the National Development and Reform Commission, or NDRC, which formulates and implements major policies concerning Chinas economic and social
development, examines and approves investment projects exceeding certain capital expenditure amounts or in specified industry sectors, including the examination and approval of foreign investment projects and formulates industrial policies and
investment guidelines for natural resource industries, such as the coal industry. In addition, the NDRC administers coal export activities and export quotas jointly with the Ministry of Commerce. The NDRC is also responsible for the evaluation and
implementation of the pricing mechanism that links the prices of coal and power;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the Ministry of Land and Resources (MLR), which has the authority to grant land use licenses and mining right permits, approve the
transfer and lease of mining rights, and review the transfer price of mining rights and reserve estimates;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the State Administration of Coal Mine Safety (SACMS), which is responsible for the implementation and supervision of the relevant safety
laws and regulations applicable to coal mines and coal mining operations;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | the Ministry of Railways (MOR), which supervises Chinas railway operations and provides strategic development plans for railway
transportation. The MOR, together with the NDRC, reviews all applications for railway construction plans, including railways designated or used for coal transportation; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the State Environmental Protection Administration of China (SEPA), which supervises and controls environmental protection and monitors
Chinas environmental system at the national level.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

Pricing

Until 2002, the production and pricing of coal have generally been subject to close control and supervision by the PRC
government, which centrally manages the production and pricing of coal. To transition from a planned economy to market economy practices, the PRC government eliminated the state guideline for coal prices on January 1, 2002 and aimed to
establish pricing mechanism that reflect market demand.

Under the Price Law of the Peoples Republic of
China, the PRC government reserves the right to intervene in price fluctuations of important commodities such as coal. The State Council and the provincial governments, autonomous regions and municipalities directly under the PRC government may
adopt intervention measures, such as restricting margins or profits, and imposing price limits. Since 2002, NDRC has executed temporary measures several times to prevent and control unusual fluctuations in thermal coal prices.

To ensure the stable supply of thermal coal and reduce pricing pressure on electric power companies, NDRC issued
Announcement No. 46 on June 19, 2008 to implement, from such date until December 31, 2008, temporary price caps on thermal coal. On December 3, 2008, NDRC issued the Notice Relating to the Good Preparation for Inter Provincial
Coal Production Transportation Works (Fa Gai Yun Xing [2008] No. 3294), which announced the elimination of the price control measures implemented in June 2008. On December 30, 2008, NDRC issued an announcement (No. 67) to abolish the
temporary price intervention measures on thermal coal, which became effective on January 1, 2009. On December 14, 2009, NDRC published the Guidance on the Improvement of Linking Up Coal Manufacture, Transportation and Demand, by allowing
enterprises to choose the manner in which it transports coal. The Guidance reiterates the governments support for the market orientation of the coal industry.

We sell our coal both on the spot market and under the contract and letter of intent. We set the purchase volume and
schedule in a period of time (generally, within one year) in the sales contract and letter of intent with our customers. The purchase price in the contract is set at the time of execution of contract, however, the purchase price in the letter of
intent is set at the time of actual sales.



15



---

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.



|                                                 |  |                                              |  |                                              
|------------------------------------------------ |  | -------------------------------------------- |  | ---------------------------------------------
|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               |  | 5% to 7%                                     
|                                                 |  |                                             
|Education surcharge                              |  | Amount of VAT and business tax               |  | 3%                                           
|                                                 |  |                                             
|Local education surcharge                        |  | Amount of VAT and business tax               |  | 1%                                           
|                                                 |  |                                             
|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                  |  | Jining City, Shandong Province RMB8 per tonne



|(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 results 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.

Imports and Exports

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

Our company has not
been authorized as a PRC coal exporter. Our coal export is conducted through three export agents including China National Coal Industry Import and Export Corporation, Minmetals Trading Co., Ltd. and Shanxi Coal Import & Export Group Corp.

Pursuant to the Administrative Measures of Coal Export Quota, the NDRC and the Ministry of Commerce are
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 MOFCOM. Authorized coal exporters are also required to report their monthly quota usage to the NDRC.

The regulations provide 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
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



16



---



| |  |  | other circumstances which require an adjustment to the coal export quotas.
| | - |  | --------------------------------------------------------------------------

The total national quota approved for 2008 and 2009 was 47.7 million and 51.0 million, respectively, and the
2010 quota is 25.5 million tonnes.

According to the Notice of the Customs Tariff Committee of the State
Council on Revising the Tariff Rates on the Export of Aluminum Alloy, Coke and Coal (Shui Wei Hui 2008 No. 25), beginning August 20, 2008, the provisional tariff rate of coke, coking coal and soft coal will be 40%, 10%, and 10%
respectively. Export tariffs are generally passed to the purchaser. Therefore, changes in export tariffs do not directly affect us.

Domestic Trading of Coal

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

Pursuant to the Environmental Protection Law, the State Environmental Protection Administration is
authorized to formulate national environmental quality and discharge standards and to monitor Chinas environmental system at the national level to protect the environment. Environmental protection bureaus at the county level and above are
responsible for environmental protection within their respective jurisdiction.

China has promulgated a series
of laws and regulations. Through these laws and regulations, China has established national and local environmental protection legal frameworks and issued 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 must adopt effective measures to control and properly dispose waste materials.

In the environmental impact statement of a construction project, the project operator must assess the pollution and
environmental hazards the project is likely to produce and its impact on the ecosystem and measures for their prevention and control. The statement shall, after initial examination by the authorities in charge of the construction project, be
submitted by specified procedure to the competent department of environmental protection administration for approval. Facilities for the prevention and control of pollution must be designed, constructed and implemented simultaneously with the
primary construction contemplated by a project. These facilities must be inspected by the competent environmental protection authority and determined to conform with specified requirements before they can be implemented.

Enterprises that discharge pollutants must report to and register with the relevant authorities in accordance with the
provisions of a department of environmental protection administration under the State Council. Enterprises that discharge pollutants in excess of the prescribed national or local standards will be fined for excessive discharge according to State
provisions and will be responsible for eliminating and controlling the pollution.

According to the Law on
Prevention and Control of Water Pollution of the Peoples Republic of China, 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 waste water 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.

Violators of the Environmental Protection Law and various environmental regulations may be subject to warnings, payment of damages and fines. Any entity undertaking construction work or manufacturing
activities before the pollution and waste control and processing facilities are inspected and approved by the environmental protection department may be ordered to suspend production or operations and may be fined. The violators of relevant
environment protection laws and regulations may be exposed to criminal liability if violations resulted in severe loss of property, personal injuries or death.



17



---

The rehabilitation of mining sites is another priority of the PRC
government. Under the Law of Land Administration of the Peoples Republic of China and the Land Rehabilitation Regulations, issued by the State Council in 1988, 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. A coal producers failure to comply with this requirement or its failure to return the mining site to its original state will result in the imposition of fines, rehabilitation fees and/or
rejection of applications for land use rights by the local bureau of land and resources.

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 (Opinions), announcing 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 these documents, or those that violate the provisions of this document, will be punished accordingly. 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. This regulation specifies 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 as specified
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, while
a file recording their entry into the mine should be maintained.

In addition, the State Administration of
Work Safety issued five sets of supplemental measures: (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); (iii) the Measures for the Supervision and Inspection of Coal Mine Safety Training (for Trial Implementation); (iv) the Guiding
Opinions on Persons in Charge of Coal Mines and Production and Operation Management Personnel Going into Mines as Foremen; (v) the Measures for Rewarding the Reporting of Major Latent Work Safety Related Dangers in, and Violations of the Law
by, Coal Mines (for Trial Implementation).

Coal Industry  Australian Regulatory Matters

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 impacts, noise impacts, planning issues (such as approvals to expand existing mines or to develop new mines), and health and safety issues. Industrial relations are regulated under both federal and
state laws. Australian state governments also require coal companies to post deposits or give other security against land which is being used for mining and exploration, with those deposits being returned or security released after satisfactory
reclamation is completed.



18



---

Environmental

Each state and territory in Australia has its own legal regime regarding environment and planning and there is a
Commonwealth environment regime in respect of matters of national environmental significance. In addition, each state and territory also has a legal regime dealing with mining in particular. The mining legislation in each state and territory
generally operates concurrently with environment and planning legislation. The mining legislation governs exploration and mining licenses, including the restoration of land following the completion of mining activities.

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. First, obtaining major environment/planning developmental approval addressing planning and significant environmental
issues; and second, obtaining pollution control approvals, regarding pollution control issues such as emissions to the atmosphere; emissions in waters; noise impacts, impacts from blasting; dust impacts; the generation, handling, storage and
transportation of waste.

The Commonwealth environment regime will apply if matters of national environmental
significance are likely to be significantly impacted. If so, Commonwealth approval will be required.

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; equipment, plant and substances; 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 federal government is currently conducting a review of health and safety legislation with a view to harmonizing requirements across the country.

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).

Carbon Pollution Reduction Scheme

The Federal Labor government ratified the Kyoto Protocol in December 2007. Under the treaty, Australia has a target of
restricting greenhouse gas emissions to 108% of 1990 levels during the 2008 to 2012 commitment period. The government has also committed to a 60% reduction in emissions by 2050, from 2000 levels. To assist in meeting these targets, the Australian
Federal government has announced that it intends to establish a cap and trade emissions trading scheme by 2013, named the Carbon Pollution Reduction Scheme. This scheme will impose costs on greenhouse gas emissions that will affect our business
 however, the government is likely to provide some support for the coal industry for the first few years of the scheme. If Carbon Pollution Reduction Scheme starts to implement and we will need to buy the volume of energy greenhouse gas
emissions, our revenue may decrease and our business may be adversely affected.

Foreign Investment

No specific restrictions apply in relation to foreign investment in Australias coal industry. However, under
Australian law and the Australian governments foreign investment policy, certain acquisitions must be notified to obtain the prior approval of the Treasurer before proceeding. These include acquisitions of substantial interests in an
Australian business where the value of the business total assets is, or the proposal value is, above US$100.0 million. It also includes (a) proposals to establish new businesses involving a total investment of US$10.0 million or more;
(b) offshore takeovers of a foreign company whose Australian subsidiaries or assets are valued at more than US$200.0 million, and account for less than 50% of the target companys global assets (different thresholds apply to U.S.
investors); (c) acquisition of shares in a company or trust which holds more than 50% of its assets in Australian urban land (regardless of the value of that acquisition); and (d) all direct investments in an Australian foreign
business by foreign governments or their agencies (irrespective of the size of that Australian business or value of that acquisition and made either directly or through a company that is owned 15% or more by a foreign government).



19



---

Power Generation Industry

The Electric Power Law and the Electric Power Regulatory Ordinance

The Electric Power Law of the Peoples Republic of China (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 permit, the regulatory inspections of power generators and grid companies and the legal liabilities 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 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.

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

Coal Chemical Processing Industry

The State announced in the Coal Law its encouragement and support for coal mining enterprises and other enterprises to
produce both coal and electricity, coking coal and coal chemicals. The NDRC issued the Notice of Strengthening the Administration of Coal Chemical Processing Industry and Improving the Healthy Development of the Industry, 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 and its implementation regulations, enterprises that
produce products 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, the total income derived from such product for tax purposes will be reduced by 90%. Coke oven waste gas, one of the primary raw materials at one of our methanol
production facilities, is one of the materials listed on in the catalogue.



|C. | Organizational Structure
|-- | ------------------------

As of December 31, 2009, our Company consisted of 17 departments, namely the Secretariat of the Board of Directors, Audit Department of the Board of Directors, Department of Coordination, Department
of Human Resources, Department of Financial Planning, Enterprise Management Department, Information Management Department, Enterprise Development Department, Risk Management Department, General Control Center, Department of Production Technology,
Department of Safety Inspection, Electrical Engineering and Power Department, Ventilation and Dust Elimination Department, Geological Survey Department, Office of Community Relationship and Technical Center.



20



---

The diagram below sets forth our organization as of December 31, 2009:

LOGO

| |  |  |  |                  |  | 
| |  |  |  | ---------------- |  | 
| |  |  |  | subsidiaries     |  | 
| |  |  |  | production units |  | 



21



---



|(1) | with the exception of Yancoal Australia Pty Limited and its subsidiaries, which are incorporated in Australia, all of our other subsidiaries are
incorporated in the PRC
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | indirectly held by Felix through wholly-owned subsidiaries
|--- | ----------------------------------------------------------

|(3) | subsequent to December 31, 2009, our equity interest in Heze Nenghua and Tianhao Chemicals was increased to 98.33% and 99.89%, respectively
|--- | -------------------------------------------------------------------------------------------------------------------------------------------



|D. | Property, Plants and Equipment
|-- | ------------------------------

Real Property and Leasehold Property

As of December 31, 2009, the net book value of our property, plant and equipment was RMB18,877.1 million. The
properties for which we own land use rights in China occupy an area of approximately 7,133.5 thousand square meters, while the coalfields to which we possess mining rights in Australia occupy an area of approximately 1,717,220.0 thousand
square meters. Under PRC law, our land use rights for properties in China during the validity of the grant 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 Australia law.

Coal Mines and Coal
Production Facilities

The Six Coal Mines currently operated by us are all located in the
southwestern part of Shandong Province. All of these mines are connected by our railway network, which provides direct access to our customers or indirectly through the PRC national railway or highway system. We acquired Austar Coal Mine in 2004 and
subsequently acquired Shanxi Nenghua, which operates Tianchi Coal Mine, in 2006. We own 98.33% of Heze Nenghua, which operates Zhaolou Coal Mine. Zhaolou Coal Mine commenced commercial operations in December 2009.

In December 2009, we acquired the entire equity interest in Felix through Yancoal Australia. Felix is a company
incorporated in Australia whose principal activities include the mining, sales and exploration of coal. The major coal assets currently owned by Felix are located in New South Wales and Queensland. As of the date of this annual report, Felix has an
ownership interest in the following operational coal mines: Ashton Coal Mine (consisting of an underground coal mine and an open-pit coal mine), Minerva Coal Mine, Yarrabee Coal Mine and Moolarben Coal Mine (consisting of an underground coal mine
and an open-pit coal mine). Felix also holds ownership interests in three exploratory mines and a 15.4% equity interest in Newcastle Coal Infrastructure Group, a joint venture that is responsible for constructing and operating the third export
terminal at Newcastle Port.



22



---

The map below shows the location of the Six Coal Mines in Shandong Province
and our railway system:

LOGO

The map below shows the location of Austar Coal Mine and coal mines owned by Felix:

LOGO



23



---

The map below shows the location of Tianchi Coal Mine:

LOGO



24



---

The map below shows the location of Zhaolou Coal Mine:

LOGO



25



---

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



|                                                           |  |        |          |  |           |  |          |         |  |  |          |  |  |           |          |  |            |  |          |       |  |  |          |  |  |  |         | 
|---------------------------------------------------------- |  | ------ | -------- |  | --------- |  | -------- | ------- |  |  | -------- |  |  | --------- | -------- |  | ---------- |  | -------- | ----- |  |  | -------- |  |  |  | ------- | 
|                                                           |  |        |          |  | Xinglong- |  |          |         |  |  |          |  |  |           |          |  |            |  |          |       | 
|                                                           |  | Nantun |          |  | 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, 2009) |  |        |          |  |           |  |          |         |  |  |          |  |  |           |          |  |            |  |          |       |  |  |          |  |  |  |         | 
|                                                           |  |        |          |  |           |  |         
|Total in-place proven and probable reserves(2)(3)          |  |        | 118.20   |  |           |  | 326.13   |         |  |  | 288.36   |  |  |           | 457.47   |  |            |  | 413.42   |       |  |  | 227.54   |  |  |  | 1,831.2 | 
|                                                           |  |        |          |  |           |  |         
|Mining recovery rate (%)                                   |  |        | 80.75    |  |           |  | 80.58    |         |  |  | 82.57    |  |  |           | 84.02    |  |            |  | 65.27    |       |  |  | 81.59    |  |  |  | N/A     | 
|                                                           |  |        |          |  |           |  |         
|Coal preparation plant recovery rate (%)(4)                |  |        | 83.54    |  |           |  | 61.69    |         |  |  | 77.05    |  |  |           | 69.10    |  |            |  | 51.90    |       |  |  | 73.68    |  |  |  | 69.10   | 
|                                                           |  |        |          |  |           |  |         
|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)                |  |        | 8.60     |  |           |  | 8.29     |         |  |  | 8.81     |  |  |           | 8.41     |  |            |  | 6.78     |       |  |  | 6.20     |  |  |  | N/A     | 
|                                                           |  |        |          |  |           |  |         
|Type of coal                                               |  |        | steam    |  |           |  | steam    |         |  |  | steam    |  |  |           | steam    |  |            |  | steam    |       |  |  | steam    |  |  |  | N/A     | 
|                                                           |  |        |          |  |           |  |         
|Leased/owned                                               |  |        | owned    |  |           |  | owned    |         |  |  | owned    |  |  |           | owned    |  |            |  | owned    |       |  |  | owned    |  |  |  | N/A     | 
|                                                           |  |        |          |  |           |  |         
|Assigned/unassigned(5)                                     |  |        | assigned |  |           |  | assigned |         |  |  | assigned |  |  |           | assigned |  |            |  | assigned |       |  |  | assigned |  |  |  | N/A     | 
|                                                           |  |        |          |  |           |  |         
|Average calorific value(Kcal/kg)                           |  |        | 5,572    |  |           |  | 5,881    |         |  |  | 5,890    |  |  |           | 5,586    |  |            |  | 5,467    |       |  |  | 5,412    |  |  |  | N/A     | 
|                                                           |  |        |          |  |           |  |         
|Sulfur content (%)                                         |  |        | 0.74     |  |           |  | 0.47     |         |  |  | 0.52     |  |  |           | 0.60     |  |            |  | 0.56     |       |  |  | 0.52     |  |  |  | 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 coal preparation input capacity                   |  |        | 1.8      |  |           |  | 3.0      |         |  |  | 3.0      |  |  |           | 4.0      |  |            |  | 3.0      |       |  |  | 5.0      |  |  |  | 19.8    | 
|                                                           |  |        |          |  |           |  |         
|Raw coal production                                        |  |        |          |  |           |  |          |         |  |  |          |  |  |           |          |  |            |  |          |       |  |  |          |  |  |  |         | 
|                                                           |  |        |          |  |           |  |         
|2000                                                       |  |        | 4.5      |  |           |  | 6.2      |         |  |  | 5.3      |  |  |           | 6.7      |  |            |  | 4.8      |       |  |  |         |  |  |  | 27.5    | 
|                                                           |  |        |          |  |           |  |         
|2001                                                       |  |        | 4.9      |  |           |  | 6.6      |         |  |  | 6.2      |  |  |           | 7.1      |  |            |  | 4.1      |       |  |  | 5.1      |  |  |  | 34.0    | 
|                                                           |  |        |          |  |           |  |         
|2002                                                       |  |        | 3.6      |  |           |  | 7.1      |         |  |  | 6.4      |  |  |           | 8.1      |  |            |  | 5.2      |       |  |  | 8.0      |  |  |  | 38.4    | 
|                                                           |  |        |          |  |           |  |         
|2003                                                       |  |        | 4.7      |  |           |  | 7.0      |         |  |  | 7.3      |  |  |           | 8.2      |  |            |  | 6.0      |       |  |  | 10.1     |  |  |  | 43.3    | 
|                                                           |  |        |          |  |           |  |         
|2004                                                       |  |        | 4.1      |  |           |  | 7.4      |         |  |  | 7.0      |  |  |           | 8.5      |  |            |  | 4.9      |       |  |  | 7.3      |  |  |  | 39.2    | 
|                                                           |  |        |          |  |           |  |         
|2005                                                       |  |        | 4.0      |  |           |  | 6.6      |         |  |  | 5.0      |  |  |           | 7.5      |  |            |  | 4.5      |       |  |  | 7.0      |  |  |  | 34.6    | 
|                                                           |  |        |          |  |           |  |         
|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    | 



26



---



|                                                       |  |        |  |                      |  |         |  |         |  |           |  |            |  |      
|------------------------------------------------------ |  | ------ |  | -------------------- |  | ------- |  | ------- |  | --------- |  | ---------- |  | -----
|                                                       |  | Nantun |  | Xinglong-     zhuang |  | Baodian |  | Dongtan |  | Jining II |  | Jining III |  | Total
|                                                       |  |        |  |                      |  |         | 
|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 
|                                                       |  |        |  |                      |  |         | 
|Cumulative raw coal production as of December 31, 2009 |  | 63.5   |  | 95.0                 |  | 84.3    |  | 104.8   |  | 50.8      |  | 61.9       |  | 460.3



|(1) | Our estimates of total in-place proven and probable reserves are reported after deduction of actual production volume and non-accessible reserves up
to December 31, 2009. Non-accessible reserves are defined as the portion of identified resources estimated to be not accessible by application of one or more accessibility factors within an area.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | In-place reserves refer to coal in-situ prior to the deduction of pillars of support, barriers or constraints for longwall mining.
|--- | ----------------------------------------------------------------------------------------------------------------------------------

|(3) | See the individual description of each mine for relevant mining methods used.
|--- | -----------------------------------------------------------------------------

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

|(5) | Assigned reserves refer to coal which has 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 refer to coal which has not been committed, and which would require new mineshafts, 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. Nantun began commercial production initially in 1973 with a designed annual raw coal production capacity of 1.5 million tonnes of coal. In 1993, the designed annual production capacity for Nantun was increased to
2.4 million tonnes after the completion of a renovation project. The main coal seam of Nantun is divided into two leaves. The thickness of the upper leaf averages 5.35 meters and the thickness of the lower leaf averages 3.21 meters. As of
December 31, 2009, the total in-place proven and probable reserves on the main coal layer were approximately 118.2 million tonnes. At this mine, we generally use the fully-mechanized sublevel caving mining method to extract coal from the
upper layer of the coal seam and use a fully-mechanized longwall system to mine the lower layer of the coal seam. As of December 31, 2009, Nantun produced coal from three work-faces.

Nantuns coal preparation plant produces mainly No. 2 and No. 3 Clean Coal and employs only 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. The main coal seam
of Xinglongzhuang is concentrated in one leaf with an average thickness of 8.3 meters. As of December 31, 2009, the total in-place proven and probable reserves on the main coal layer were approximately 326.1 million tonnes. At this mine,
we principally use the fully-mechanized sublevel caving method to extract coal from the coal seam of Xinglongzhuang Coal Mine. Xinglongzhuang produced coal from two work-faces as of December 31, 2009.

The Xinglongzhuang coal preparation plant produces No. 1, No. 2 and No. 3 Clean Coal. The principal pieces
of equipment in the Xinglongzhuang coal preparation plant, including its jig machines, sink-and-float separation machines and floating separation machines, were imported.

Baodian Coal Mine. Baodian is located in the central western portion of our coalfield. 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, 2009, the total in-place proven and probable reserves on the main coal layer were approximately 288.4 million tonnes. At this mine, we generally use the fully-mechanized sublevel caving method to extract coal from the upper
layer of the coal seam and use mechanized longwall faces to mine the lower layer of the coal seam. Baodian Coal Mine maintained two work-face as of December 31, 2009.

The original design of the Baodian coal preparation plant is similar to that of the Nantun coal preparation plant.
Subsequently, we remodeled the jig machines and added a modified sink-and-float separation processing system at the Baodian coal preparation plant. Most of the equipment used in the Baodian coal preparation plant was manufactured in the PRC. The
principal products of Baodians coal preparation plant are No. 2 and No. 3 Clean Coal.

Dongtan Coal Mine. Dongtan is located in the central eastern portion of our coalfield. 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, 2009, the main coal layer held approximately 457.5 million tonnes of in-place proven and probable reserves. At this mine, we generally use the fully-mechanized sublevel caving method to extract coal from the sections of the
coal seam with one layer of coal and the upper layer in the sections with two layers of coal. Dongtan Coal Mine maintained two work-faces as of December 31, 2009.



27



---

Most of the equipment used at the Dongtan coal preparation plant, including
the jig machines, a modified sink-and-float separation processing system, was manufactured in the PRC. The principal products of Dongtans coal preparation plant are No. 2 and No. 3 Clean Coal.

Jining II Coal Mine. Jining II is located in the northern portion of the Jining coalfield. 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, 2009, the total in-place proven and probable reserves on the main coal layer were approximately 413.4 million tonnes. At this coal mine, we use mainly the fully-mechanized sublevel caving
method to extract coal from the upper layer of the coal seam and use mechanized longwall faces to mine the lower layer of the coal seam. Jining II Coal Mine produced coal from two work-faces as of December 31, 2009.

The main equipment used in Jining II is jig machines, most of which are manufactured in the PRC. The principal products
of the coal preparation plant of Jining II are No. 2 and No. 3 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 commenced commercial production in 2000 with a designed annual raw coal production capacity of 5 million
tonnes. As of December 31, 2009, the total in-place proven and probable reserves on the main coal layer were approximately 227.5 million tonnes. The average thickness of the main coal seam of Jining III is 6.2 meters. We mainly rely on the
fully-mechanized sublevel caving method to extract coal from three work-faces in Jining III Coal Mine as of December 31, 2009.

The main pieces of equipment used in Jining III are jig machines, which were imported from Germany. The principal products of the coal preparation plant of Jining III are No. 2 and No. 3 Clean
Coal.

The following table sets forth information about Tianchi Coal Mine and Zhaolou Coal Mine, our coal
mines in China that are operated by subsidiaries of the Company:



|                                                           |  |          |  |                 |  |       
|---------------------------------------------------------- |  | -------- |  | --------------- |  | ------
|                                                           |  | Tianchi  |  | Zhaolou         |  | Total 
|                                                           |  |          | 
|Background data:                                           |  |          |  |                 |  |       
|                                                           |  |          | 
|Commencement of construction(1)                            |  | 2004     |  | 2004            |  | N/A   
|                                                           |  |          | 
|Commencement of commercial production(1)                   |  | 2006     |  | 2009            |  | N/A   
|                                                           |  |          | 
|Coalfield area(square kilometers)                          |  | 20.0     |  | 143.36          |  | 163.36
|                                                           |  |          | 
|Reserve data:(2)
(millions tonnes as of December 31, 2009) |  |          |  |                 |  |       
|                                                           |  |          | 
|Recoverable reserves(3)(4)                                 |  | 27.73    |  | 105.79          |  | 133.52
|                                                           |  |          | 
|Mining recovery rate (%)                                   |  | 78.04    |  | 80.15           |  | N/A   
|                                                           |  |          | 
|Coal preparation plant recovery rate (%)(5)                |  | N/A      |  | 73              |  | N/A   
|                                                           |  |          | 
|Depth of mine(meters underground)                          |  | 225      |  | 905             |  | N/A   
|                                                           |  |          | 
|Average thickness of main coal seam(meters)                |  | 4.56     |  | 5.15            |  | N/A   
|                                                           |  |          | 
|Type of coal                                               |  | Steam    |  | 1/3 coking coal |  | N/A   
|                                                           |  |          | 
|Leased/owned                                               |  | owned    |  | owned           |  | N/A   
|                                                           |  |          | 
|Assigned/unassigned(6)                                     |  | assigned |  | assigned        |  | N/A   
|                                                           |  |          | 
|Average calorific value(Kcal/kg)                           |  | 5,177    |  | 6,937           |  | N/A   
|                                                           |  |          | 
|Sulfur content (%)                                         |  | 0.90     |  | 0.53            |  | N/A   
|                                                           |  |          | 
|Production data:(million tonnes)                           |  |          |  |                 |  |       
|                                                           |  |          | 
|Designed raw coal production capacity                      |  | 1.2      |  | 3.0             |  | 4.2   



28



---



|                                                       |  |         |  |         |  |      
|------------------------------------------------------ |  | ------- |  | ------- |  | -----
|                                                       |  | Tianchi |  | Zhaolou |  | Total
|                                                       |  |         | 
|Designed coal preparation input capacity               |  |        |  |        |  |     
|                                                       |  |         | 
|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 
|                                                       |  |         | 
|Cumulative raw coal production as of December 31, 2009 |  | 3.4     |  | 0.04    |  | 3.44 



|(1) | With respect to 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) | Our estimates of recoverable reserves are reported after deduction of actual production volume and non-accessible reserves up to December 31,
2009. Non-accessible reserves are defined as the portion of identified resources estimated to be not accessible by application of one or more accessibility factors within an area.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Recoverable reserves refer to the amount of proven and probable reserves that can be recovered after taking into account all mining and preparation
losses that occur during the processing of coal after it is mined.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | See the individual description of each mine for relevant mining methods used.
|--- | -----------------------------------------------------------------------------

|(5) | Coal preparation plant recovery rate refers to the wash plant recovery rate of raw coal used during the production of our coal products.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------

|(6) | Assigned reserves refer to coal which has 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 reserve refers to coal which has not been committed, and which would require new mineshafts, mining equipment, or plant facilities before operations
could begin on the property.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Tianchi Coal Mine. Tianchi Coal Mine is an underground
mine located in Heshun County of Shanxi Province, with an area of approximately 20 square kilometers. Tianchi Coal Mine commenced commercial production in 2006 and the designed production capacity of Tianchi Coal Mine was increased to
1.2 million tonnes per annum in the same year.

Tianchi Coal Mine is operated by inclined shaft
development, and it produces mostly lean coal and meager lean coal. The average thickness of this target coal seam is 4.56 meters. As of December 31, 2009, the total recoverable reserves of Tianchi Coal Mine were approximately 27.8 million
tonnes. We principally used the longwall caving mining method to extract coal from one work-face at Tianchi Coal Mine as of December 31, 2009.

Tianchi Coal Mine underwent a technological upgrade and installed a sink-and-float separation processing system and started trial production in April 2009. The primary piece of equipment in this system
are slanted wheel separators, which are manufactured in China. Tianchi Coal Mine primarily produces thermal coal.

We do not employ mining contractors at Tianchi Coal Mine. 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
Province and surrounding areas on the Yangshe Railway as well as the national railway network.

Zhaolou
Coal Mine. Zhaolou Coal Mine is an underground longwall mine located in the central portion of Juye Coal Field in Shandong Province. Zhaolou Coal Mine covers an area of approximately 145 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 three million tonnes. Zhaolou Coal Mine produces 1/3 coking coal. The average thickness of the main coal seam of Zhaolou Coal Mine is 5.15 meters. The total recoverable reserves of Zhaolou Coal Mine were approximately
105.8 million tonnes as of December 31, 2009. We principally used the longwall caving mining method to extract coal from the one work-face at Zhaolou Coal Mine as of December 31, 2009.

The coal preparation plant at Zhaolou Coal Mine commenced commercial production in September 2009. The main equipment
used in the coal preparation plant are slanted wheel separators and heavy-medium cyclone machine, which are mainly produced in China. The main product of Zhaolous coal preparation plant is No. 2 Clean Coal.

We do not employ mining contractors at Zhaolou Coal Mine. The operations at Zhaolou Coal Mine are powered by electricity
from local power grids. We ship coal products to Hebei Province and surrounding areas by trucks.



29



---

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



|                                                          |  |        |                        |  |          |  |          |         |  |  |              |  |  |           |                        |  |        |  |              |              |  |  |              |  |  |       |                  |  |  |  |            |  |  |  |          | 
|--------------------------------------------------------- |  | ------ | ---------------------- |  | -------- |  | -------- | ------- |  |  | ------------ |  |  | --------- | ---------------------- |  | ------ |  | ------------ | ------------ |  |  | ------------ |  |  | ----- | ---------------- |  |  |  | ---------- |  |  |  | -------- | 
|                                                          |  | Austar |                        |  | Yarrabee |  |          | Minerva |  |  | Ashton       |  |  | Moolarben |                        |  | Athena |  |              | Harry-brandt |  |  | Wilpeena     |  |  | Total |                 
|Background data:                                          |  |        |                        |  |          |  |          |         |  |  |              |  |  |           |                        |  |        |  |              |              |  |  |              |  |  |       |                  |  |  |  |            |  |  |  |          | 
|Commencement ofconstruction(1)                            |  |        | 1998                   |  |          |  | 1981     |         |  |  | 2004         |  |  |           | 2003                   |  |        |  | 2009         |              |  |  | N/A          |  |  |       | N/A              |  |  |  | N/A        |  |  |  | N/A      | 
|Commencement ofcommercialproduction(1)(2)                 |  |        | 2000                   |  |          |  | 1982     |         |  |  | 2005         |  |  |           | 2004                   |  |        |  | 2010         |              |  |  | N/A          |  |  |       | N/A              |  |  |  | N/A        |  |  |  | N/A      | 
|Coalfield area (squarekilometers)                         |  |        | 97.49                  |  |          |  | 33.95    |         |  |  | 1,558        |  |  |           | 10.38                  |  |        |  | 17.4         |              |  |  | 782.73       |  |  |       | 40.4             |  |  |  | 34.65      |  |  |  | 2,540.51 | 
|Reserve data:(3) (millions tonnes as ofDecember 31, 2009) |  |        |                        |  |          |  |          |         |  |  |              |  |  |           |                        |  |        |  |              |              |  |  |              |  |  |       |                  |  |  |  |            |  |  |  |          | 
|Resources                                                 |  |        | 129                    |  |          |  | 146.5    |         |  |  | 74.6         |  |  |           | 437.27                 |  |        |  | 706.4        |              |  |  | 560          |  |  |       | 96               |  |  |  | 27.2       |  |  |  | 2,176.97 | 
|Recoverablereserves(4)(5)                                 |  |        | 44.6                   |  |          |  | 39.1     |         |  |  | 25.2         |  |  |           | 92.07                  |  |        |  | 356.8        |              |  |  | N/A          |  |  |       | N/A              |  |  |  | N/A        |  |  |  | 557.77   | 
|Depth of mine (metersunderground)                         |  |        | 300                    |  |          |  | N/A      |         |  |  | N/A          |  |  |           | 190-280                |  |        |  | N/A          |              |  |  | N/A          |  |  |       | N/A              |  |  |  | N/A        |  |  |  | N/A      | 
|Type of coal                                              |  |        | semi-hard  coking coal |  |          |  | PCI      |         |  |  | thermal coal |  |  |           | semi-soft  coking coal |  |        |  | thermal coal |              |  |  | thermal coal |  |  |       | anthracite  coal |  |  |  | PCI        |  |  |  | N/A      | 
|Leased/owned                                              |  |        |                        |  |          |  |          |         |  |  |              |  |  |           |                        |  |        |  |              |              |  |  |              |  |  |       |                  |  |  |  | owned      |  |  |  | N/A      | 
|                                                          |  |        | owned                  |  |          |  | owned    |         |  |  | owned        |  |  |           | owned                  |  |        |  | owned        |              |  |  | owned        |  |  |       | owned            |  |  |  |            |  |  |  |          | 
|Assigned/unassigned(6)                                    |  |        | assigned               |  |          |  | assigned |         |  |  | assigned     |  |  |           | assigned               |  |        |  | assigned     |              |  |  | unassigned   |  |  |       | unassigned       |  |  |  | unassigned |  |  |  | N/A      | 
|Average calorific value(Kcal/kg)                          |  |        | 6,196                  |  |          |  | 7,300    |         |  |  | 6,500        |  |  |           | 7,100                  |  |        |  | 6,650        |              |  |  | N/A          |  |  |       | N/A              |  |  |  | N/A        |  |  |  | N/A      | 
|Sulfur content (%)                                        |  |        | 1.30                   |  |          |  | 0.70     |         |  |  | 0.60         |  |  |           | 0.65                   |  |        |  | 0.50         |              |  |  | N/A          |  |  |       | N/A              |  |  |  | N/A        |  |  |  | N/A      | 
|Production data: (milliontonnes)                          |  |        |                        |  |          |  |          |         |  |  |              |  |  |           |                        |  |        |  |              |              |  |  |              |  |  |       |                  |  |  |  |            |  |  |  |          | 
|Designed raw coal productioncapacity                      |  |        | 2.0                    |  |          |  | 1.7      |         |  |  | 2.8          |  |  |           | 5.6                    |  |        |  | 16.0         |              |  |  | N/A          |  |  |       | N/A              |  |  |  | N/A        |  |  |  | 28.1     | 
|Designed coal preparationinput capacity                   |  |        | 2.0                    |  |          |  | 1.7      |         |  |  | N/A          |  |  |           | 6.5                    |  |        |  | 16.0         |              |  |  | N/A          |  |  |       | N/A              |  |  |  | N/A        |  |  |  | 26.2     | 
|Raw coal production                                       |  |        |                        |  |          |  |          |         |  |  |              |  |  |           |                        |  |        |  |              |              |  |  |              |  |  |       |                  |  |  |  |            |  |  |  |          | 
|2006                                                      |  |        | 0.4                    |  |          |  |         |         |  |  |             |  |  |           |                       |  |        |  |             |              |  |  |             |  |  |       |                 |  |  |  |           |  |  |  | 0.4      | 
|                                                          |  |        |                        |  |          |  |          |         | 
|2007                                                      |  |        | 1.6                    |  |          |  |         |         |  |  |             |  |  |           |                       |  |        |  |             |              |  |  |             |  |  |       |                 |  |  |  |           |  |  |  | 1.6      | 
|                                                          |  |        |                        |  |          |  |          |         | 
|2008                                                      |  |        | 1.9                    |  |          |  |         |         |  |  |             |  |  |           |                       |  |        |  |             |              |  |  |             |  |  |       |                 |  |  |  |           |  |  |  | 1.9      | 
|                                                          |  |        |                        |  |          |  |          |         | 
|2009                                                      |  |        | 1.9                    |  |          |  |         |         |  |  |             |  |  |           |                       |  |        |  |             |              |  |  |             |  |  |       |                 |  |  |  |           |  |  |  | 1.9      | 
|                                                          |  |        |                        |  |          |  |          |         | 
|Cumulative raw coalproduction as ofDecember 31, 2009      |  |        | 5.8                    |  |          |  |         |         |  |  |             |  |  |           |                       |  |        |  |             |              |  |  |             |  |  |       |                 |  |  |  |           |  |  |  | 5.8      | 



30



---



|(1) | Austar Coal Mine was closed in 2003 as the result of a fire. We acquired Austar Coal Mine in 2004 and implemented a production expansion and
technology upgrade in 2005. Austar Coal Mine resumed part or its operations in October 2006. Each of Ashton Coal Mine and Moolarben Coal Mine has an open-pit coal mine and an underground coal mine, and 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) | Our estimates of recoverable reserves are reported after deduction of actual production volume and non-accessible reserves up to December 31,
2009. Non-accessible reserves are defined as the portion of identified resources estimated to be not accessible by application of one or more accessibility factors within an area.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Recoverable reserves refer to the amount of proven and probable reserves that can be recovered after taking into account all mining and preparation
losses that occur during the processing of coal after it is mined.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | See the individual description of each mine for relevant mining methods used.
|--- | -----------------------------------------------------------------------------

|(5) | Ashton Coal Mine and Moolarben Coal Mine have both the open-pit coal mine and underground coal mine. The depth of mine indicates the depth of the
underground mines.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Assigned reserves refer to coal which has 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 reserve refers to coal which has not been committed, and which would require new mineshafts, mining equipment, or plant facilities before operations
could begin on the property.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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.



31



---

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 AUD32.0 million from Southland Coal Pty Limited, an independent
third party.

We invested approximately AUD230.3 million in the reconstruction, capacity expansion and
technology upgrade of Austar Coal Mine in 2005, which included funding for equipment and machinery. After we completed the foregoing investment in Austar Coal Mine, the mine resumed commercial production in October 2006.

Austar Coal Mine produces semi-hard coking coal. The average thickness of the main coal seam of Austar Coal Mine is 5.30
meters. As of December 31, 2009, the mines total recoverable reserves were approximately 44.6 million tonnes. we principally use the fully-mechanized caving method to extract coal from one work-face.

The main equipment used in Austar Coal Mine is the heavy-medium cyclone machine. These heavy-medium cyclone machines are
manufactured in Australia.

We have not contracted the mining operations at Austar to a third-party mining
contractor. The operations at Austar Coal Mine are powered by electricity from local power grids. We ship the coal products from the 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. Yarrabee Coal Mine covers an area of 34 square kilometers. Yarrabee Coal Mine was constructed in 1981 and commenced commercial production in 1982.

Felix wholly owns Yarrabee Coal Mine. The designed annual capacity of Yarrabee Coal Mine is 1.7 million tonnes.
Yarrabee Coal Mine mainly produces PCI. The average thickness of the main coal seam of Yarrabee Coal Mine is 3.2 to 4 meters. As of December 31, 2009, the mines total recoverable reserves were approximately 39.1 million tonnes. We
use shearers to conduct surface mining at Yarrabee Coal Mines.

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 are manufactured in Australia.

We have not contracted the mining operations at Yarrabee Coal Mine to third-party mining contractors. The operations at
Yarrabee Coal Mine are powered by electricity from local power grids. We ship the coal products from the Yarrabee Coal Mine to Gladstone Port via railway.

Minerva Coal Mine.Minerva Coal Mine is an open pit mine located in Bowen Basin, Queensland, Australia and is accessible by railway. Minerva Coal Mine covers an area of 1,558 square kilometers.
Minerva Coal Mine was constructed in 2004 and commenced commercial production in 2005.

Felix holds 51% of the
equity interest in Minerva Coal Mine through Proserpina Coal Pty Ltd. The designed annual capacity of Minerva Coal Mine is 2.8 million tonnes. Minerva Coal Mine mainly produces thermal coal. The average thickness of the main coal seam of
Minerva Coal Mine is 0.6 to 3.2 meters. As of December 31, 2009, the mines total recoverable reserves were approximately 25.2 million tonnes, of which approximately 12.9 million tonnes was attributable to us pursuant to our
shareholding percentage. We use shearers to conduct surface mining at Minerva Coal Mine.

Minerva Coal Mine
does not have a coal preparation plant. We separate raw coal and then transport it to customers. We have not contracted the mining operations at Minerva Coal Mine to a third-party mining contractor. The operations at Minerva Coal Mine are powered by
electricity from local power grids. We ship the coal products from the Minerva Coal Mine to Gladstone Port via railway.

Ashton Coal Mine.Ashton Coal Mine has both an underground mine and an open pit mine located in Hunter Valley, New South Wales, Australia and is accessible by railway. Ashton Coal Mine covers an
area of 10.38 square kilometers. The open-pit and underground mines of Ashton Coal Mine were constructed in 2003 and commenced commercial production in 2004.

Felix holds 60% of the equity interest in Ashton Coal Mine through White Mining (NSW) Pty Limited. The designed annual capacity of Ashton Coal Mine is 5.6 million tonnes, of which the annual capacity
of the underground mine is 3.0 million tonnes and the annual capacity of the open-pit mine is 2.7 million tonnes. Ashton Coal Mine mainly produces semi-soft coking coal. The average thickness of the main coal seam of the open-pit mine and
the underground mine of Ashton Coal Mine are 2.14 to 2.26 and 1.7 to 2.4 meters, respectively. As of December 31, 2009, the mines total recoverable reserves were approximately 92.1 million tonnes, of which approximately
55.2 million tonnes was attributable to us pursuant to our shareholding percentage. We principally use the longwall operation to extract coal from the underground coal seam and shearers to conduct surface mining at the open-pit mine of Ashton
Coal Mine.



32



---

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 are manufactured in Australia. We have not contracted the mining operations at Ashton Coal Mine to a third-party mining contractor. The operations at Ashton Coal
Mine are powered by electricity from local power grids. We ship the coal products from the Ashton Coal Mine to Newcastle Port via railway.

Moolarben Coal Mine.Moolarben Coal Mine has both an underground mine and an open pit mine located in Hunter Valley, New South Wales, Australia and is accessible by railway. Moolarben Coal Mine
covers an area of 17.4 square kilometers. The open-pit mine of Moolarben Coal Mine was constructed in 2009 and commenced commercial production in May 2010, while the construction of the underground mine of Moolarben Coal Mine will be completed in
2012 and commence commercial production in 2013.

Felix holds 80% of the equity interest in Moolarben Coal
Mine through Moolarben Coal Mines Pty Limited. The designed annual capacity of Moolarben Coal Mine is 16.0 million tonnes, of which the annual capacity of the underground mine is 12.0 million tonnes and the annual capacity of the open-pit
mine is 4.0 million tonnes. Moolarben Coal Mine mainly 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, 2009, the mines total
recoverable reserves were approximately 356.8 million tonnes, of which approximately 258.4 million tonnes was attributable to us pursuant to our shareholding percentage. We principally use the longwall operation to extract coal from the
underground coal seam and shearers to conduct surface mining at the open-pit mine of Moolarben Coal Mine.

Moolarben 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 are manufactured in Australia.

We have
not contracted the mining operations at Moolarben Coal Mine to a third-party mining contractor. The operations at Moolarben Coal Mine are powered by electricity from local power grids. We ship the coal products from the Moolarben Coal Mine to
Newcastle Port via railway.

Mining Rights

Mining Rights for Nantun, Xinglongzhuang, Baodian, Dongtan and Jining II

According to the approval from the State-owned Supervision Department and the Coal Industry Supervision Department that
was obtained at the establishment of the Company, the Mining Agreement entered into with Yankuang Group in 1997 and its supplemental agreement, we undertook to make ten annual payments of approximately RMB13.0 million to Yankuang Group beginning
1997 as compensation for the depletion of the coal resources at the coal mines at Nantun, Xinglongzhuang, Baodian, Dongtan and Jining II. If the State implements new regulations after the initial ten years, the compensation would be adjusted
accordingly. By 2007, we had made total payments of RMB130.0 million.

In September 2006, the State Council
approved the Implementation Plan for the Compensation System Reform Testing in relation to Deepening Coal Resources as jointly promulgated by the Finance Department, Ministry of Land and Resources and the National Development and Reform Commission.
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 the remaining reserves. Shandong Province is subject to this mining right fee.
As of the date of this annual report, there remains uncertainty on the detailed rules of the implementation plan regarding the use of mining rights in Shandong Province.

Since 2008, we have made provisions of RMB5 per tonne of coal extracted to cover any resource compensation fees that may
arise from the mining rights of the five foregoing coal mines, in anticipation of Shandong Provinces implementation of detailed rules for resource compensation fees. For the year ended December 31, 2009, our provisions for resource
compensation fees for the five mines was approximately RMB135.8 million.

Jining III Coal Mine

Pursuant to the Jining III Coal Mine Acquisition Agreement dated August 4, 2000 that we entered into
with Yankuang Group, the consideration for the mining right of Jining III Coal Mine is approximately RMB132.5 million, which will be paid to Yankuang Group in ten equal interest-free annual installments commencing from 2001. During 2009, we paid
RMB13.2 million to Yankuang Group.

Austar Coal Mine

We obtained an exploration license for Austar Coal Mine from the NSW Department of Primary Industries in 2005. Pursuant to
the underlying Asset Sale Agreement, we are obligated to pay AUD4.0 million after obtaining the exploration license to the new exploration site adjacent to the Austar Coal Mine.



33



---

Tianchi Coal Mine

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

Zhaolou Coal Mine

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

Felix Coal Mines

We acquired the entire equity interest in Felix for RMB20,428.0 million. The fair market value of our attributable reserves and attributable resources was AUD2,845.2 million.

Railway Assets

The assets in our railway transportation business, consist of 13 diesel locomotives, 18 steam locomotives, 362 rail cars, and approximately 204 kilometers of railway tracks constructed for coal
transportation that connect most of our coal mines with Yankuang Group and Zouxian Power Plant, which is located in Jining City, Shandong Province. The railway network also connects to two of major national railways, namely, the Beijing-Shanghai
Railway and Yanzhou-Shijiugang Railway. As of December 31, 2009, our railway transportation business employed approximately 4,000 employees.

Methanol and Cogeneration Power Plants

Yulin
Nenghua. We have constructed a 600,000 tonne methanol plant in Shaanxi Province, which is operated by our subsidiary, Yulin Nenghua. 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, methanol synthetic gas cold reactor, methanol synthetic water cold reactor and propylene refrigeration compressors. Yulin Nenghua also operates a
supporting power plant with an installed capacity of 60 megawatts.

Tianhao Chemicals. We have
constructed a 100,000 tonne methanol plant and a supporting power plant in Xiaoyi City of Shanxi Province through our subsidiary, Tianhao Chemicals. The primary pieces of equipment in the methanol plant include low pressure wet type spiral gas
cabinets, coke oven gas compressors, reformers and converters.

Hua Ju Energy. Hua Ju Energy is
headquartered in Zoucheng City, Shandong Province. Hua Ju Energy owns and operates six cogeneration power plants, each of which is able to supply electric power and heat to our coal mine in its proximity. The power plants consist of 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 megawatts and the annual power generation capacity and
heat supply capacity are 1.0 to 1.1 billion kilowatt-hours and 1.0 to 1.2 million steam tonnes, respectively. The main pieces of equipment used at Hua Ju Energy includes energy conversion CFB boilers and extraction and condensing steam
turbines.



34



---

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 amendment to the annual report on its behalf.



|                       |  |                                     |  |                 
|---------------------- |  | ----------------------------------- |  | ----------------
|                       |  | YANZHOU COAL MINING COMPANY LIMITED
|                       |  | (Registrant)                       
|                       |  |                                    
|Date: December 1, 2010 |  | By:                                 |  | /s/    LI
Weimin
|                       |  | Name:                               |  | LI Weimin       
|                       |  | Title:                              |  | General Manager 



35