Annual Results 2014

Corporate Presentation

Disclaimer

The information contained in this presentation is intended solely for your personal reference. In

addition, such information contains projections and forward-looking statements that reflect the

Company’s current views with respect to future events and financial performance. These views are

based on assumptions subject to various risks. No assurance can be given that future events will

occur, that projections will be achieved, or that the Company’s assumptions are correct. Actual

results may differ materially from those projected. Past track record cannot be used as guidance for

future performances.

Geographical Coverage

Page 1

Saskatchewan

Shandong

ShanxiInner Mongolia

Autonomous RegionShaanxi

Western Australia

Queensland

New South Wales

Hong Kong

1 2014 Operation Review

2 Market Analysis

3 Operation Targets for 2015

4 Operation Strategies for 2015

Page 2

Agenda

Page 3

Part I 2014 Operation Review

Results overview

Coal business

Financial position

Operation of major subsidiaries

Key projects

Page 4

Results overview

2014 2013 ChangeChange

(%)

2H

2014

1H

2014

1. Coal business

(‘000 tonnes)

Saleable coal

production

volume

66,890 66,995 -105 -0.16 33,203 33,687

Saleable coal

sales volume123,075 103,995 19,080 18.35 63,658 59,417

2. Sales income (RMB mn) 60,370.8 56,401.8 3,969.0 7.04 29,437.4 30,933.4

3. Net income (RMB mn) 766.2 777.4 -11.2 -1.44 179.0 587.2

Growth in sales of self-produced coal

Page 5

Coal business – marketing

Optimized product mix

(mn tonnes)

合计 省内矿井 省外矿井 境外矿井 贸易煤

123.08

37.86

7.29

20.90

57.03104

35.63

7.82

21.15

39.402014年度

2013年度

2014

2013

Total Mining sites in

Shandong

Mining sites

in other

provinces

Overseas

mining

sites

Coal purchased

from other

companies

Clean coal, 28%

Screened raw coal, 27%

Mixed coal and others,

13%

Semi-hard coking coal,

2%

Semi-soft coking coal,

2%

PCI, 5%

Thermal Coal, 24%

精煤

经筛选原煤

混煤及其他

半硬焦煤

半软焦煤

喷吹煤

动力煤

Clean coal

Screened raw

coal

Mixed coal

and others

Semi-soft

coking coal

Semi-hard

coking coal

PCI

Thermal Coal

Company 2014 2013Y-O-Y 2014

Change Change (%) Q4 Q3 Q2 Q1

The

Headquarters439.94 534.79 -94.85 -17.74 403.04 416.39 455.39 482.60

Shanxi Neng Hua 210.69 282.24 -71.55 -25.35 189.98 192.20 210.11 250.54

Heze Neng Hua 525.65 608.56 -82.91 -13.62 587.80 475.42 467.61 576.86

Ordos Neng Hua 163.02 188.36 -25.34 -13.45 165.42 148.10 169.59 178.10

Yancoal Australia 463.77 573.62 -109.85 -19.15 411.33 425.98 489.40 549.93

Yancoal

International287.48 304.36 -16.88 -5.55 295.41 475.42 298.23 291.65

ASP by subsidiaries of the Company

Page 6

Coal business – selling price

420

480

540

600

660

12/30 3/12 5/23 8/3 10/14 12/25 3/7

秦皇岛港山西5500大卡优混煤平仓价

兖州煤业5500大卡混煤现货价格

60.00

67.50

75.00

82.50

90.00

01-01 03-14 05-25 08-05 10-16 12-27

澳大利亚BJ动力煤现货价格兖煤澳洲动力煤销售平均价格

Spot price trend of the Headquarters

and Qinhuangdao port

Spot price trend of Yancoal Australia

and Australia BJ thermal coal

(RMB/tonne) (USD/tonne)

Australia BJ spot price of thermal coal

Average contracted price of Yancoal Australia thermal coal

5,500K of Shanxi quality mixed coal FOB price in Qinghuangdao

5,500K of Quality mixed coal listing spot price of Yanzhou Coal

(RMB/tonne)

2014 2013

Y-O-Y 2014

ChangeChange

(%)2H 1H Change

Change

(%)

The

Headquarters250.74 263.74 -13.00 -4.93 235.43 264.91 -29.48 -11.12

Shanxi

Neng Hua183.69 228.65 -44.96 -19.66 206.33 162.40 43.93 27.05

Heze

Neng Hua344.91 463.98 -119.07 -25.66 383.88 312.16 71.72 22.98

Ordos

Neng Hua155.21 157.79 -2.58 -1.64 158.99 150.13 8.86 5.90

Yancoal

Australia363.25 434.10 -70.85 -16.32 329.72 404.45 -74.73 -18.48

Yancoal

International273.94 262.36 11.58 4.41 265.44 283.33 -17.89 -6.31

Page 7

Coal business – cost of sales

Domestic and overseas coal mines achieved the cost

control targets set at the beginning of 2014Cost Structure of Coal Business

53.90

16.86 19.2233

9.37

94.45

44.70

66.27

20.14 19.7736.29

9.83

100.88

46.39

0

30

60

90

1202014年度 2013年度

17.68

44.05

2.35

10.28

16.4910.4

3.25

21.09

13.21

20.36

50.14

0

15

30

45

60

山西能化 菏泽能化 兖煤澳洲

减人提效 材料消耗 清费立税

减少外包 销量增加 澳元贬值

(RMB/tonne)

2014 2013

Factors Affecting Cost of Sales

Shanxi

Neng Hua

Heze

Neng Hua

Yancoal

Australia

Increase efficiency by

downsizing payrolls

Reduce outsourced

labour

Material savings

Increase in sales

Tax clearance

Devaluation in AUD

By cash settlement:

68%

Cash settlement, 68%

Others, 32%

By notes settlement:

89%

Optimized settlement methods to increase the efficiency and time value of capital

Optimized debt structure to maintain interest-bearing gearing ratio to be

reasonable and controllable

RMB mn 2014-12-31 2013-12-31 Change Change (%)

Cash at bank and on hand 20,196 15,364 4,832.4 31.45

Net accounts receivable 2,016 1,461 554.4 37.94

Total assets 133,098 127,458 5,639.9 4.42

Interest bearing debts 61,438 56,586 6,063.0 8.57

In which: due within one year 10,872 11,711 -839.6 -7.17

Shareholders’ equity 38,726 40,379 -1,652.9 -4.09

NAV per share (RMB) 7.87 8.21 -0.34 -4.19

Interest-bearing gearing ratio 46.16 44.40 Up 1.8 p.p. y-o-y

Page 8

Financial position

Notes settlement, 89%

Others, 11%

2

1

Page 9

Performance of major subsidiaries

-- Domestic

(RMB mn)

A relatively good profitability of the mines at the Headquarters

Apart from Ordos Neng Hua under construction, other domestic subsidiaries

made profits

Share-

holding

(%)

Net profit

2014 2013 ChangeChange

(%)2014 2H 2014 1H

The Headquarters - 2,207.9 4,402.7 -2,194.8 -49.85 823.4 1,384.5

Shanxi Neng Hua 100 -3.1 5.2 -8.3 -159.62 -0.7 -2.4

Heze Neng Hua 98.33 319.6 79.8 239.8 300.50 117.6 202.0

Ordos Neng Hua 100 -279.9 -526.7 246.8 46.86 -167.2 -112.7

Yulin Neng Hua 100 325.1 176.4 147.8 84.30 222.1 103.0

Huaju Energy 95.14 117.8 162.5 -44.7 -27.51 64.5 53.3

Page 10

Performance of major subsidiaries

-- International

Improved operation by transforming business model

Lowered financial expenses by enhancing the management and

control of foreign exchange and capital

Adjusted debt structure by issuing convertible bonds

Stick to the “expedite discussion” strategy, thus raising the long-term

contracted coal prices

Enhanced profitability

Yancoal Australia cut loss significantly by RMB3.13 bn1

Increased long-term contracted coal prices of Premier coal mine under

Yancoal International

2

The pre-feasibility study of Canadian potash project approved3

Completed the N143-101 technical report and a general research

Thickness of potash bed is 30 m; average grade at a 30% KCI-equivalent and

the aggregate potash resources of 4.73 bn tonnes

The pre-feasibility study approved

Project DetailsShare-

holding

Resources and

installed capacity

(mn tonnes / ’000

KWH / year)

Planned production

capacity

(mn tonnes /

’000 KWH / year)

Progress

Heze Neng Hua

Zhaolou Power Plant

Phase 198.33% 300 300 Commenced operation in Nov 2014

Wanfu coal mine 98.33% 303.8 1.8In construction, expected to put into operation

by the end of “13th Five-year” Plan

Ordos Neng Hua

Zhuan Longwan coal

mine100% 566.3 5.0

Pending approval; plan to put into operation in

2H 2015

Shilawusu coal mine 74.82% 1,729.4 10.0Pending approval; plan to put into operation at

the end of 2015

Ying Panhao coal

mine100% 2,261.7 12.0

Listed in the “12th Five-year Plan” of national

coal industry development and obtained the

approval for distribution of coal resources in

the Inner Mongolia Autonomous Region;

Expected to put into operation in 2016

Methanol project 100% – 0.6In construction, expected to put into operation

in 2015

Yancoal Australia

Moolarben coal mine

Phase 280% 1,222 16.0

Obtained approval from the New South Wales

Plan and Assessment Commission

(NSWPAC); expected to put into operation in

2016

Ashton Southeast

open cut coal mine100% 323 5.2

Obtained approval from the New South Wales

Plan and Assessment Commission

(NSWPAC), with final review pending from the

Land & Environment court of New South

Wales

Comprehensive use

of clean coal project

at Jinjitan coal mine

(shareholding

investment)

Comprehensive use of

clean coal project at

Jinjitan coal mine

(shareholding

investment)

25% 1,872 8.0 Commenced operation in Aug 2014

Page 11

Major projects

Page 12

Part 2 Market Analysis

Analysis of coal market

• Domestic

• International

Analysis of domestic

methanol market

2014 Bohai Rim thermal coal

price trend

Page 13

Analysis of domestic coal market

(RMB / tonne)

470

500

530

560

590

620

01-08 03-22 06-03 08-15 10-27 01-08

2015 coal market forecasts

• Economic policy: moving

forward while maintaining

stability

• Oversupply

• Coal export volume to decline

from a high level

• Fluctuations in coal price to

taper off

Coal prices in domestic market continuously declined in 2014

and expect to be stable gradually in 2015

Price trend of Australian BJ thermal coal

in 2014

Page 14

Analysis of international coal market

(USD / tonne)

60

66

72

78

84

90

1/1 3/28 6/22 9/16 12/11 3/7

2015 coal market forecasts

• Oversupply to ease

• Demand in Asia Pacific markets

to increase steadily

• Indonesian and Vietnamese

governments imposed

restrictions on exports

Global coal prices declined continuously in 2014,

but price fluctuation expects to taper off in 2015

Price trend of methanol in certain

districts in China since 2014

Page 15

Analysis of domestic methanol market

1,200

1,650

2,100

2,550

3,000

01-01 03-27 06-20 09-13 12-07 03-02

山东南部Southern Shandong

(RMB / tonne)

2015 domestic methanol

market forecasts

• Growth of production capacity to

decelerate

• Import volume to remain stable

• Limited demand from traditional

downstream applications

• Increasing demand from new

downstream applications

• Global oil price under great

pressure

Methanol price in domestic market in 2014 fluctuated at low level

and expects to fluctuate moderately in 2015

Page 16

Part 3 Operational Targets in 2015

Sales target

Target cost of sale per tonne

CAPEX plan

Sales target of coal: 122 mn tonnes

Page 17

Operational targets in 2015

-- sales target

(’000 tonnes) 2015 Target 2014 Actual Change Change (%)

The Headquarters 35,400 34,750 650 1.87

Shanxi Neng Hua 1,500 1,500 - -

Heze Neng Hua 4,000 3,110 890 28.62

Ordos Neng Hua 7,800 5,790 2,010 34.72

Yancoal Australia 13,880 15,740 -1,860 -11.82

Yancoal

International6,520 5,160 1,360 26.36

Self-produced coal

subtotal69,100 66,050 3,050 4.62

Coal purchased

from other

companies52,900 57,020 -4,120 -7.23

Total 122,000 123,070 -1,070 -0.87

Page 18

Operational targets in 2015

-- target cost of sale per tonne

Target

Domestic and overseas coal mines:

Cost of sale per tonne not higher than that in 2014

Page 19

CAPEX RMB9,106 mn

Promote the construction of projects

with advantages and potentials

Equipment upgrade and technology

transformation

Control

volume

Grasp

directionAdjust

product

mix

Enhance

efficiency

Operational targets in 2015

-- CAPEX plan

Page 20

Part 4 Operational Strategies for 2015

Comprehensive implementation of the whole process of value

reengineering through “3 Reductions & 3 Enhancements”

Operational Strategies

The whole process of value reengineering

through “3 Reductions & 3 Enhancements”

Page 21

三减减低效成本 减无效资产 减复杂流程

Old “3 Reductions

& 3

Enhancements”

Simplify

system

Enhance

quality

Three

Creations

Three

Enhancements

Reduce cost

of low

efficiency

Innovation

from all

Three

Reductions

Reduce

inefficient

assets

Simplify

complex

procedures

Enhance

quality and

efficiency

Speed up and

enhance

efficiency

Downsize

and enhance

efficiency

Income

generation

by all

Entrepreneurship

of all

Speed up

efficiency

Enhance

efficiency

Reduce

staff no.Reduce surfaces

of mines

Operational Strategies

Page 22

Optimize system

upgrade

Innovation of

sales model

Potential taping, cost

reduction and efficiency

improvement

Prudent capital

operation

Accelerate production transformation to

better quality and more efficient

Promote sales transformation

towards adding customer’s value

Promote management transformation

towards value creation

Prudent capital operation and

promote development towards

industry-finance synergy

Strengthen

operational control Promote the development of overseas

projects towards high efficiency

Page 25

In 2015, facing the “new normal” of the sluggish global energy economy,

Yanzhou Coal will develop steadily and create valuable returns for shareholders

in a prudent and cautious manner by carrying out plans with global vision,

strengthening management with subversive ideas, casting new advantages for

development through innovative initiatives.