Yanzhou Coal Mining plans to buy the Jining III coal mine for US$310 million from its parent Yankuang, subject to shareholders giving their approval at an extraordinary general meeting to be held in September.
The acquisition would be funded by proceeds from a planned issue of 100 million Chinese currency A shares and other sources of internal financing. Yanzhou Coal is currently debt free and has assets exceeding $918 million.
Jining III, located in China's eastern Shandong province, was expected to start commercial production in the fourth quarter of this year. The mine is forecast to produce 4 million tonnes of coal next year and will increase output to 8Mt by 2005 when it hits full production.