Yanzhou Coal Mining, the Hong Kong-listed arm of the mainland's fourth-largest coal miner, said it plans to sell more coal domestically and cut its exports.

Wu Yuxiang, chief financial officer of Yangzhou Coal, called the company's sales plan conservative for this year.

It plans to sell 34.4 million tons of coal this year, down from 35.11 million tons last year.

And the export target is 500,000 tons, compared with 3.16 million tons in 2007.

Reducing the export size was because "export prices are not as good as those domestically", he said, adding that it may export more if prices go up.

Yanzhou Coal has signed sales contracts and intentions to sell 32.3 million tons of coal to domestic firms this year.

Among that domestic-bound coal, 9.51 million tons will be sold at a price set 38.1 percent higher than a year ago.

"Our price hikes surpassed the average market hikes of about 15 percent," Wu said. "And as we signed the contracts later than our peers, we have adjusted our product mix."

The firm's average coal price was 414 yuan a ton last year.

However, the expansion of the capacity of the firm will face some uncertainties, as its Yushuwan coal mine - with an annual capacity of 8 million tons - is still undergoing its application procedures.

Wu said the firm hopes to accelerate the procedures and start the production as soon as possible.

Coal prices are at a historical high this year, Wu noted, but he doesn't believe the prices will surge sharply in the future.

"International and domestic coal prices have already reached historical highs," he said. "Electricity producers are our main consumers. We know that they are turning into the red. ... It's unrealistic to raise the coal prices further."

Last year, Yanzhou Coal Mining earned 3.2 billion yuan and its profits rose 36.1 percent year-on-year. The total sales increased by 21.3 percent to 14.56 billion yuan.

The total operating expenses surged 21 percent to 10 billion yuan.

Wu admitted that the rising expenses on aging coal, insurance and wages, as well as the climbing inflation, will put pressure on the costs of the firm.

He said that that firm wants to keep the cost increase at less than 15 percent this year.

(HK Edition 04/22/2008 page2)