Yanzhou joins the growing number of companies seeking to diversify into Mongolia, including Peabody and Rio Tinto, because of its proximity to the Chinese market.

Yanzhou plans to buy 35.5% of Haosheng from two sellers and seek a further 15.5% through an open bidding process.

China’s fourth-largest coal producer, Yanzhou will now have access to 1.64 billion tonnes of reserves held by Haosheng, developer of the Shilawusu field in northern China, as it seeks substantial output increases in the next five years.

Yanzhou expanded it first-half production by 33% year on year while sales rose by 64% to 15.2 billion yuan during the period as a strengthening Chinese economy increased spot prices at Qinhuangdao port, a domestic benchmark, by 28%. Net income grew by 34% in the period year on year.

Yanzhou vice-chairman Li Weimin said in March that the company’s output may rise by 33% after it completes the takeover of Felix.