The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Circular.

Notice convening the annual general meeting of Yanzhou Coal Mining Company Limited, to be held at the Conference Room of Wai Zhao Building, 329 South Fushan Road, Zoucheng, Shandong Province, Postal Code 273500, the People’s Republic of China (the “PRC”) on Friday, 27th June 2008 at 8:30 a.m., was published on 9 May, 2008 and sent together with this circular.

A proxy form for use at the annual general meeting is also despatched together with this circular. If you intend to attend the annual general meeting, you should complete and return the reply slip in accordance with the instructions printed thereon as soon as possible.

Whether or not you are able to attend the annual general meeting, you are strongly urged to complete and return the form of proxy in accordance with the instructions printed thereon and return them to Hong Kong Registrars Limited at Room 1712-1716, 17th Floor, Hopewell Center 183 Queen’s Road East, Hong Kong as soon as possible and in any event not later than 24 hours before the holding of the annual general meeting.

Completion and return of the proxy form will not preclude you from subsequently attending and voting at the annual general meeting or any adjourned meeting(s) should you so wish.

9 May 2008

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

General Mandate to issue H Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

General Mandate to repurchase H Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Conditions to Repurchase H Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

AGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Explanatory statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Re-election of existing Directors and election of new Directors . . . . . . . . . . . . . . 6

Re-election of existing Supervisors and election of new Supervisors . . . . . . . . . . 6

Proposed change of auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Procedures for demanding a poll by shareholders . . . . . . . . . . . . . . . . . . . . . . . . . 7

Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Wang Xin

Geng Jiahuai

Yang Deyu

Shi Xuerang

Chen Changchun

Wu Yuxiang

Wang Xinkun

Zhang Baocai

Dong Yunqing

Pu Hongjiu

Cui Jianmin

Wang Xiaojun

Wang Quanxi

298 South Fushan Road

Zoucheng

Shandong Province

PRC

Postal Code: 273500

Rooms 2608-19

26/F., The Center

Hong Kong

9 May 2008

Dear Sir or Madam,

The purpose of this circular is to provide you with information regarding the resolutions to be proposed at the forthcoming AGM, to (i) approve the general mandates to issue H Shares and to repurchase H Shares, respectively; (ii) to re-elect existing Directors and existing Supervisors and elect new Directors and new Supervisors; (iii) to authorise the change of auditors; and (iv) and to give you notice of AGM.

The PRC Company Law (to which the Company is subject) provides that a joint stock

limited company incorporated in the PRC may not repurchase its shares unless such

repurchase is effected for the purpose of (a) reducing its share capital; (b) granting shares as

reward to the staff of the company; (c) in connection with a merger between itself and

another entity that holds its shares; or (d) the repurchase is made at the request of its

division. The Articles of Association provides that subject to the approval of the relevant

regulatory authorities and compliance with the Articles of Association, share repurchase may

be effected by the Company for the purpose of reducing its share capital or in connection

with a merger between itself and another entity that holds its shares or in circumstances

permitted by law or administrative regulations.

The Hong Kong Listing Rules permit shareholders of a PRC joint stock limited

company to grant a general mandate to the Directors to repurchase H shares of such

company that are listed on the Hong Kong Stock Exchange. Such mandate is required to be

given by way of a special resolution passed by shareholders in a general meeting and special

resolution passed by holders of domestic shares and overseas listed foreign invested shares

in separate class meetings.

As the H Shares are traded on the Hong Kong Stock Exchange in Hong Kong dollars,

the price payable by the Company upon any repurchase of its H Shares will, therefore, be

made in Hong Kong dollars. As such, the approval of SAFE is required.

In accordance with the requirements of article 30 of the Articles of Association

applicable to capital reduction, the Company will have to notify its creditors of the passing

of such special resolutions and the reduction to the registered capital of the Company that

would occur should the Directors decide to exercise the Repurchase Mandate. Such

passing of such special resolutions and also by way of publication on 3 occasions of a press

announcement within 30 days after the passing of such special resolution. Creditors then

notification has been received, up to 90 days after the first publication of the press

announcement to require the Company to repay amounts due to them or to provide

guarantees in respect of such amounts.

In order to ensure flexibility and discretion to the Directors in the event that it

becomes desirable to repurchase any H Shares (including where such repurchase may lead to

an enhancement of the net asset value per Share and/or the earnings per Share), approval is

proposed to be sought from the Shareholders for the Repurchase Mandate. In accordance

with the legal and regulatory requirements described above, the Directors have given notice

to convene the AGM. At the AGM, a special resolution will be proposed to grant to the

Directors the Repurchase Mandate, i.e. a conditional general mandate to repurchase H Shares

in issue on the Hong Kong Stock Exchange with an aggregate nominal value not exceeding

10% of the aggregate nominal value of H Shares in issue of the Company as at the date of

passing of such special resolution. At a more appropriate time, the Company may convene a

class meeting for the holders of H Shares and a class meeting for the holders of Domestic

Shares to grant to the Directors the Repurchase Mandate by way of a special resolution.

The Repurchase Mandate will be conditional upon (a) the passing of the special

resolution approving the grant of the Repurchase Mandate at the AGM (b) the passing of the

special resolution approving the grant of the Repurchase Mandate at a class meeting of the

holders of H Shares and a class meeting of the holders of Domestic Shareholders to be

convened for such purpose; (c) the obtaining of the approvals of the relevant PRC regulatory

authorities as required by the laws, rules and regulations of the PRC; and (d) the Company

not being required by any of its creditors to repay or to provide guarantee in respect of any

amount due to any of them (or if the Company is so required by any of its creditors, the

Company having, in its absolute discretion, repaid or provided guarantee in respect of such

amount) pursuant to the notification procedure under article 30 of the Articles of Association

as described above. If the Company determines to repay any amount to any of its creditors

in the circumstances described under condition (d), it expects to do so out of its internal

resources. If the conditions are not fulfilled, the Repurchase Mandate will not be exercisable

by the Directors.

The Repurchase Mandate if approved at the AGM and, if convened, at the subsequent

class meetings of the holders of H Shares and the holders of Domestic Shares to be held,

separately, would expire on the earliest of (a) the conclusion of the next annual general

meeting of the Company following the passing of the subject resolution at the AGM; or (b)

the expiration of a 12-month period following the passing of the subject resolution at the

AGM; or (c) the date on which the authority set out in the subject resolution if approved at

the AGM and the class meetings of the holders of H Shares and holders of Domestic Shares

is revoked or varied by a special resolution of the members of the Company in a general

meeting.

A special resolution will be proposed at the AGM in relation to the grant of the

Repurchase Mandate to the Directors, details of which are set out in resolution numbered 12

of the AGM Notice.

An explanatory statement containing all relevant information relating to the Repurchase

Mandate is set out in the Appendix 1 to this circular. The information in the explanatory

statement is to provide you with the information reasonably necessary to enable you to make

an informed decision on whether to vote for or against the resolution to grant to the

Directors the Repurchase Mandate.

In accordance with article 146 of the Articles of Association, Mr. Wang Xin, Mr. Geng

Jiahuai, Mr. Yang Deyu, Mr. Shi Xuerang, Mr. Chen Changchun, Mr. Wu Yuxiang, Mr. Wang

Xinkun and Mr. Zhang Baocai will retire by rotation at the conclusion of the forthcoming

AGM and being eligible, offer themselves for re-election as executive Directors of the fourth

session of the Board.

At the 16th meeting of the third Session of the Board held on 18 April 2008, it was

proposed that Mr. Zhai Xigui, Mr. Li Weian and Mr. Wang Junyan be nominated as

independent non-executive Directors of the fourth session of the Board upon the retirement

of Mr. Cui Jianmin, Mr. Wang Xiaojun and Mr. Wang Quanxi, to whom the Board would

like to thank them for their contributions. Mr. Pu Hongjiu, an independent non-executive

Director, has offered himself for re-election.

The biographical details of the Directors proposed to be re-elected and the new

Directors proposed to be elected are set out in Appendix III to this circular. Ordinary

resolutions to approve their respective re-elections and elections will be proposed at the

forthcoming AGM.

In accordance with the requirement of PRC Company Laws, the workers of the

Company will re-elect Mr. Dong Yunqing as the worker representative Director of the fourth

session of the Board through democratic election.

In accordance with article 198 of the Articles of Association, Mr. Meng Xiancheng, Mr.

Song Guo and Mr. Zhang Shengdong and Mr. Liu Weixin will retire at the conclusion of the

forthcoming AGM.

At the 10th meeting of the third Session of the supervisory committee held on 18 April

2008, it was resolved that Mr. Zhou Shoucheng and Ms. Zhen Ailan be nominated as

supervisors and Mr. Song Guo and Mr. Zhang Shengdong be nominated for re-appointment as

supervisors of the fourth session of the Supervisory Committee.

The biographical details of the supervisors proposed to be re-elected and the new

supervisors proposed to be elected are set out in Appendix III to this circular. An ordinary

resolution to approve their respective re-elections and elections will be proposed at the

forthcoming AGM.

In accordance with the requirements of the PRC Company Law, the workers of the

Company will additionally elect Mr. Song Huanmin, Mr. Xu Bentai as the worker

representative Supervisors of the fourth session of the Supervisory Committee through

democratic election.

To rotate auditors periodically for better corporate governance, the Board recommended

not to renew the appointments of Deloitte Touche Tohmatsu and Deloitte Touche Tohmatsu

Certified Public Accountants Ltd and recommended the appointments of Grant Thornton and

auditors for the year 2008, respectively and to authorise the Board to fix their remuneration

and pay their other service fees. Their proposed aggregate annual remuneration is RMB6.96

million for the annual auditing and internal control evaluation. The Board considers that it is

an appropriate time for a change of auditors periodically for the benefit of the Shareholders as

Deloitte Touche Tohmatsu and Deloitte Touche Tohmatsu Certified Public Accountants Ltd

The respective appointments of Grant Thornton and Shine Wing Certified Public

subject to the passing of their appointments as an ordinary resolution in the AGM.

meeting, a resolution shall be decided on a show of hands unless a poll is demanded before or

after a vote is carried out by a show of hands.

(a) by the chairman of the meeting;

(b) by at least two (2) Shareholders present in person or by proxy entitled to vote

thereat;

(c) by one (1) or more Shareholders present in person or by proxy and representing 10

% or more of all shares carrying the right to vote at the meeting.

The demand for a poll may be withdrawn by the person who demands the same.

The Directors consider that the proposals for (i) the granting of the Issue Mandate; (ii)

the Repurchase Mandate; (iii) the re-election of existing Directors and existing Supervisors

and the election of new Directors and new Supervisors; and (iv) the proposed change of

auditors are in the best interests of the Company and its Shareholders as a whole.

Accordingly, the Directors recommend the Shareholders to vote in favour of the subject

resolutions as set out in the AGM Notice.

Yours faithfully,

By order of the Board

The Hong Kong Listing Rules permit companies with a primary listing on the Hong

Kong Stock Exchange to purchase their securities subject to certain restrictions. Repurchases

must be funded out of funds legally available for the purpose and in accordance with the

company is incorporated or otherwise established. Any repurchase must be made out of

funds which are legally available for the purpose and in accordance with the laws of PRC

and the memorandum of association and bye-laws of the company. Any premium payable on

a repurchase over the par value of the shares may be effected out of funds of the company

share premium account.

The Directors are seeking to obtain a general mandate to repurchase H Shares to give

the Company the flexibility to do so as they believe that it is in the best interests of the

Company and its Shareholders for the Directors to have a general authority from the

Shareholders to enable the Company to repurchase H Shares in the market. Such repurchase

may, depending on the market conditions and funding arrangement at the time, lead to an

enhancement of the net assets value of the Company and/or its earnings per Share and will

only be made when the Directors believe that such a repurchase will benefit the Company

and its Shareholders.

As at the Latest Practicable Date, the registered capital of the Company is

RMB4,918,400,000 comprising 1,958,400,000 H Shares of RMB1.00 each and 2,960,000,000

Domestic Shares of RMB1.00 each, of which 2,600,000,000 Domestic Shares are held by

Yankuang Group Corporation Limited and 360,000,000 Domestic Shares are held by other

Shareholders.

Subject to the passing of special resolution numbered 12 set out in the AGM Notice

and the passing of special resolutions, approving the grant of the Repurchase Mandate to the

Directors at a class meeting for the holders of H Shares and a class meeting for the

Domestic Shareholders to be convened, respectively, the Directors will be granted the

Repurchase Mandate until the end of the Relevant Period (as defined in special resolution

numbered 11(b) in the AGM Notice). Additionally, the exercise of the Repurchase Mandate

is subject to the approvals of the relevant PRC regulatory authorities as required by the

laws, rules and regulations of the PRC being obtained and the Company not being required

by any of its creditors to repay or to provide guarantee in respect of any amount due to any

of them (or if the Company is so required by any of its creditors, the Company having, in

its absolute discretion, repaid or provided guarantee in respect of such amount) pursuant to

the notification procedure under article 30 of the Articles of Association. The notification to

the creditors will not be issued until the class meetings of the holders of H Shares and

holders for Domestic Shares to be convened have approved the Repurchase Mandate by way

of special resolution.

As at the Latest Practicable Date and assuming that the Repurchase Mandate would

only be required to be approved at the AGM, the exercise in full of the Repurchase Mandate

would result in up to 195,840,000 H Shares (assuming there is no issue and repurchase of H

Shares from the Latest Practicable Date up to the date of AGM) being repurchased by the

Company during the Relevant Period. As the Repurchase Mandate, if approved at the AGM,

is also required to be approved by the holders of Domestic Shares and the holders of H

Shares at class meetings to be convened, the total number of H Shares that could be

repurchased upon the exercise in full the Repurchase Mandate may be different. The

Company will update this information in an explanatory statement to be issued at the time

when the Company convenes the class meetings of the holders of Domestic Shares and

holders of H Shares seeking approvals by the holders of Domestic Shares and holders of H

Shares for the Repurchase Mandate.

internal resources (which may include surplus funds and undistributed profits) legally

available for such purpose in accordance with the Articles of Association and the applicable

laws, rules and regulations of the PRC.

The Company is empowered by its Articles of Association to purchase its H Shares.

Any repurchases by the Company may only be made out of either the capital paid up on the

relevant shares to be repurchased, or the funds of the Company that would otherwise be

available for dividend or distribution or out of the proceeds of a new issue of shares made

for such purpose or from sums standing to the credit of the share premium account of the

Company. Under PRC laws, H Shares so repurchased will be treated as cancelled and the

nominal value of the H Shares so cancelled. The Company may not purchase securities on

the Hong Kong Stock Exchange for a consideration other than cash or for settlement

otherwise than in accordance with the trading rules of the Hong Kong Stock Exchange from

time to time.

Based on the financial position disclosed in the recently published audited accounts for

the year ended 31 December 2007, the Directors consider that there will not be any material

adverse impact on the working capital or gearing position of the Company in the event that

the Repurchase Mandate is to be exercised in full at any time during the proposed

repurchase period. The number of H Shares to be repurchased on any occasion and the price

and other terms upon which the same are repurchased will be decided by the Directors at the

relevant time having regard to the circumstances then prevailing and in the best interests of

the Company.

The Hong Kong Listing Rules provide that the listing of all the H Shares repurchased

by the Company shall automatically be cancelled and the relevant share certificates shall be

cancelled and destroyed. Under PRC laws, the H Shares repurchased by the Company will

to the aggregate nominal value of the H Shares so cancelled.

The highest and lowest prices at which the H Shares have been traded on the Hong

Kong Stock Exchange during each of the twelve months preceding the Latest Practicable

Date were as follows:

April 8.35 7.57

May 10.54 8.06

June 12.10 10.00

July 14.46 11.80

August 14.40 9.00

September 13.50 12.90

October 17.82 14.60

November 16.88 11.82

December 16.50 13.56

January 16.80 10.58

February 14.80 12.70

March 13.20 8.96

April 14.96 10.80

May (up to the Latest Practicable Date) 15.4 14.4

As at the Latest Practicable Date, the interests of substantial shareholders of the

Company, as defined under the Hong Kong Listing Rules, were as follows:

Yankuang Group

Corporation Limited

Domestic Shares (state

legal person share)

Beneficial Owner Corporate 2,600,000,000 52.86%

(a) None of the Directors nor, to the best of their knowledge having made all

reasonable enquiries, any of their associates, have any present intention to sell

any Shares to the Company or any of its subsidiaries under the Repurchase

Mandate if such is approved by the Shareholders of the Company.

(b) The Directors have undertaken to the Hong Kong Stock Exchange that, so far as

the same may be applicable, they will exercise the power of the Company to

repurchase the H Shares pursuant to the Repurchase Mandate in accordance with

the Hong Kong Listing Rules and the applicable laws of PRC.

(c) No connected person (as defined in the Hong Kong Listing Rules) of the

Company has notified the Company that he has a present intention to sell H

Shares to the Company or its subsidiaries, or has undertaken not to do so, if the

Repurchase Mandate is granted and is exercised.

If on the exercise of the power to repurchase Shares pursuant to the Repurchase

increases, such increase will be treated as an acquisition for the purposes of Rule 32 of

Takeovers Code. As a result, a shareholder or group of shareholders acting in concert could

obtain or consolidate control of the Company and become obliged to make a mandatory

offer in accordance with Rules 26 and 32 of the Takeovers Code.

Assuming that the substantial shareholders do not dispose of its Shares, if the

Repurchase Mandate was exercised in full, the percentage shareholdings of the substantial

shareholders before and after such repurchase would be as follows:

Yankuang Group Corporation Limited 52.86% 55.05%

On the basis of the shareholdings held by the substantial shareholders named above, an

exercise of the Repurchase Mandate in full will not have any implications for the substantial

shareholders under the Takeovers Code.

Assuming that there is no issue of Shares between the Latest Practicable Date and the

date of a repurchase, an exercise of the Repurchase Mandate whether in whole or in part

will not result in less than the relevant prescribed minimum percentage of the Shares of the

Company being held by the public as required by the Hong Kong Stock Exchange. The

Directors have no intention to exercise the Repurchase Mandate to an extent which may

result in a public shareholding of less that such minimum percentage.

The Directors are not aware of any consequences that may arise under the Takeovers

Code and/or any similar applicable law of which the Directors are aware, if any, as a result

of any repurchases made under the Repurchase Mandate.

The Company had not repurchased any of its H Shares (whether on the Hong Kong

Stock Exchange or otherwise) during the six months period preceding the Latest Practicable

Date.

will be held at 8:30 a.m. on 27 June 2008 at the Conference Room of Wai Zhao Building,

1. To consider and approve the working report of the board of directors of the

2. To consider and approve the working report of the supervisory committee of the

Company for the year ended 31 December 2007;

3. To consider and approve the audited financial statements of the Company as at

and for the year ended 31 December 2007;

4. To consider and approve the proposed profit distribution plan (the cash dividend

distribution plan) of the Company for the year ended 31 December 2007, and to

authorize the Board to distribute such dividends to the shareholders of the

Company;

5. To consider and approve the respective re-appointments of the following persons

as the non-worker representative executive Directors of the fourth session of the

Board for a term of three years, which will become effective upon the conclusion

of the AGM:

(i) Mr. Wang Xin (re-appointment)

(ii) Mr. Geng Jiahuai (re-appointment)

(iii) Mr. Yang Deyu (re-appointment)

(iv) Mr. Shi Xuerang (re-appointment)

(v) Mr. Chen Changchun (re-appointment)

(vi) Mr. Wu Yuxiang (re-appointment)

(vii) Mr. Wang Xinkun (re-appointment)

(viii) Mr. Zhang Baocai (re-appointment)

6. To consider and approve the respective new appointments or re-appointment (as

the case may be) of following persons, upon the retirement of Mr. Cui Jianmin,

Mr. Wang Xiaojun and Mr. Wang Quanxi, as the independent non-executive

Directors of the fourth session of the Board for a term of three years which will

become effective upon conclusion of the AGM:

(i) Mr. Pu Hongjiu (re-appointment)

(ii) Mr. Zhai Xigui (new appointment)

(iii) Mr. Li Weian (new appointment)

(iv) Mr. Wang Junyan (new appointment)

7. To consider and approve the respective new appointments or re-appointment (as

the case may be) of following persons as the non-worker representative

supervisors of the fourth session of the supervisory committee, which will become

effective upon conclusion of the AGM:

(i) Mr. Song Guo (re-appointment)

(ii) Mr. Zhou Shoucheng (new appointment)

(iii) Mr. Zhang Shengdong (re-appointment)

(iv) Ms. Zhen Ailan (new appointment)

8. To determine the remuneration of the directors and Supervisors of the Company

for the year ending 31 December 2008;

10. To consider and approve the appointments of Grant Thornton and Shine Wing

for the year 2008, respectively, and to approve an aggregate annual remuneration

of RMB6.96 million for the annual auditing and internal control evaluation

auditing services, and to authorize the Board to fix and pay their other service

fees.

11. To consider and approve the following resolution:

(a) the Board be and is hereby granted an unconditional general mandate to

issue, allot and deal with additional H Shares in the share capital of the

Company and to make or grant offers, agreements and options in respect

thereof, subject to the following terms:

(i) such mandate shall not extend beyond the Relevant Period save that the

Board may during the Relevant Period make or grant offers, agreements

or options which might require the exercise of such powers after the

end of the Relevant Period;

(ii) the number of shares allotted or agreed conditionally or unconditionally

to be allotted (whether pursuant to an option or otherwise) by the

Board shall not exceed 20 % of the number of H Shares in issue as at

the date of the this resolution; and

(iii) the Board will only exercise its power under such mandate in

accordance with the Company Law of the PRC and the Rules

Governing the Listing of Securities on The Stock Exchange of Hong

Kong Limited (as amended from time to time) and only if all necessary

approvals from the China Securities Regulatory Commission and/or

other relevant PRC government authorities are obtained;

(b) for the purpose of this resolution:

capital of the Company with a par value of RMB1.00 each, and which are

held and traded in Hong Kong dollars;

the earliest of:

(i) the conclusion of the next annual general meeting of the Company

following the passing of this resolution;

(ii) the expiration of a 12-month period following the passing of this

resolution; or

(iii) the date on which the authority set out in this resolution is revoked or

varied by a special resolution of the shareholders of the Company in a

general meeting; and

(c) contingent on the directors resolving to issue shares pursuant to paragraph

(a) of this resolution, the Board be and is hereby authorized to approve,

execute and do or procure to be executed and done, all such documents,

deeds and things as it may consider relevant in connection with the issue of

such new shares including, but not limited to, determining the time and place

of issue, making all necessary applications to the relevant authorities and

entering into an underwriting agreement (or any other agreement), to

determine the use of proceeds and to make all necessary filings and

registrations with the relevant PRC, Hong Kong and other authorities, and to

make such amendments to the Articles of Association as it thinks fit so as to

reflect the increase in registered capital of the Company and to reflect the

new share capital structure of the Company under the intended allotment and

issue of the shares of the Company pursuant to the resolution under

12. To consider and approve the following resolution:

(a) subject to paragraphs (b) and (c) below, the Relevant Period (as defined in

paragraph 11(b) above) during which the Board may exercise the power of

the Company to repurchase the issued H Shares of the Company on the

Hong Kong Stock Exchange, subject to and in accordance with all applicable

laws, rules and regulations and/or requirements of the governmental or

regulatory body of securities in the PRC, the Hong Kong Stock Exchange or

of any other governmental or regulatory body be and is hereby approved;

(b) the aggregate nominal value of H Shares of the Company authorised to be

repurchased subject to the approval in paragraph (a) above during the

Relevant Period shall not exceed 10% of the aggregate nominal value of the

issued H Shares of the Company as at the date of the passing of this

resolution;

(c) the approval in paragraph (a) above shall be conditional upon:

(i) the passing of a special resolution with the same terms as the resolution

set out in this paragraph (except for this sub-paragraph (c)(i)) at the

AGM of the Company to be held on 27 June 2008 and the passing of a

special resolution with the same terms as the resolution set out in this

paragraph (except for this sub-paragraph (c)(i)) at a class meeting for

the holders of H Shares and at a class meeting of the holders of

Domestic Shares to be convened for such purpose;

(ii) the approval of the relevant PRC regulatory authorities as may be

required by laws, rules and regulations of the PRC being obtained by

the Company if appropriate; and

(iii) the Company not being required by any of its creditors to repay or to

provide guarantee in respect of any amount due to any of them (or if

the Company is so required by any of its creditors, the Company

having, in its absolute discretion, repaid or provided guarantee in

respect of such amount) pursuant to the notification procedure set out

in article 30 of the Articles of Association of the Company;

(d) subject to the approval of all relevant PRC regulatory authorities for the

repurchase of such H Shares being granted, the Board be hereby authorised

to:

(i) amend the Articles of Association of the Company as it thinks fit so as

to reduce the registered share capital of the Company and to reflect the

new capital structure of the Company upon the repurchase of H Shares

of the Company as contemplated in paragraph (a) above; and

(ii) file the amended Articles of Association of the Company with the

(e) Conditional upon:

(i) the special resolutions relating to the general mandate for the issue of

additional H Shares;

(ii) the special resolution for the grant of a general mandate to repurchase

shares at the AGM and;

(iii) the special resolutions to be as set out in the notice of class meeting for

the holders of H Shares and class meeting for the holders of Domestic

Shareholders, respectively, being passed,

the aggregate nominal amount of the H Shares of the Company which will

be repurchased by the Company subject to the authority of the Directors

granted under the special resolutions pursuant to the AGM and the class

meetings shall be added to the aggregate nominal amount of share capital

that may be allotted or agreed conditionally or unconditionally to be allotted

by the directors of the Company pursuant to special resolution numbered 11

16th meeting of the third session of the Board, which was published on the website of The Stock

Exchange of Hong Kong Limited.

By Order of the Board of Directors

Zoucheng, Shandong, the PRC, 9 May 2008

Limited at the close of business on Tuesday, 27 May 2008 are entitled to attend the AGM after completing

the registration procedures for attending the AGM.

(B) Holders of H Shares, who intend to attend the AGM, must deliver the completed reply slips for attending

the AGM to the Office of the Secretary of the Board no later than Friday, 6 June 2008.

Shareholders can deliver the necessary documents for registration to the Company in person, by post or by

facsimile. Further details of the requirements of the instrument appointing the proxies are set out in note

(D) below.

(C) Details of the Office of the Secretary of the Board are as follows:

298 South Fushan Road

Zoucheng

Shandong Province 273500

PRC

Tel: 86-537-5382319

Fax: 86-537-5383311

(D) Each holder of H Shares who has the right to attend and vote at the AGM is entitled to appoint in writing

one or more proxies, whether a Shareholder or not, to attend and vote on his behalf at the AGM.

The proxies of a Shareholder who has appointed more than one proxy may only vote on a poll. The

instrument appointing a proxy must be in writing under the hand of the appointer or his attorney duly

authorized in writing, or if the appointer is a legal entity, either under seal or under the hand of a director

or a duly authorized attorney. If that instrument is signed by an attorney of the appointer, the power of

attorney authorizing that attorney to sign, or other documents of authorization, must be notarized.

For holders of H Shares, the power of attorney or other documents of authorization and proxy forms must

be delivered to Hong Kong Registrars Limited (Room No. 1712-1716, 17th Floor, Hopewell Centre, 183

of the AGM or any adjournment thereof in order for such documents to be valid.

(E) The H share register will be closed from Wednesday, 28 May 2008 to Thursday, 26 June 2008, during

which time no transfer of H Shares will be registered. Holders of H Shares who wish to attend the AGM

and be qualified for entitlement to the proposed dividends for the year ended 31 December 2007 must

deliver their duly stamped instruments of transfer, accompanied by the relevant share certificates, to Hong

Wanchai Hong Kong) no later than 4:00 p.m. Tuesday 27 May 2008.

(F) The AGM is expected to last half a day. Shareholders attending the AGM are responsible for their own

transportation and accommodation expenses.

As at the date of this notice, the directors of the Company are Mr. Wang Xin, Mr.

Geng Jiahuai, Mr. Yang Deyu, Mr. Shi Xuerang, Mr. Chen Changchun, Mr. Wu Yuxiang, Mr.

Wang Xinkun, Mr. Zhang Baocai and Mr. Dong Yunqing, and the independent non-executive

directors of the Company are Mr. Pu Hongjiu, Mr. Cui Jianmin, Mr. Wang Xiaojun and Mr.

Wang Quanxi.

The respective biographical details of the candidates for the non-worker representative

executive directors of the fourth session of the Board, the candidates for the independent

non executive Directors of the fourth session of the Board, the candidates for the

non-worker representative supervisors of the fourth session of the supervisory committee of

WANG Xin, aged 49, a researcher in engineering technique application and a doctor of

engineering technology, the Chairman of the Board. Mr. Wang is also the Vice Chairman of

the board, the General Manager and the Party Committee Deputy Secretary of Yankuang

Group, the chairman of Yankuang Xinjiang Neng Hua Company Limited, the Chairman of

Yanmei Heze Nenghua Company Limited, the Chairman of Yancoal Australia Pty Limited

and the Chairman of Austar Coal Mine Pty Limited. Mr. Wang joined the predecessor of the

Company in 1982 and became the Vice General Manager of Yankuang Group in 2000. He

was appointed as the director of the board of directors and vice general manager of

Yankuang Group in 2002 and was appointed as the vice chairman of the board of directors

and the general manager of Yankuang Group in 2003. In 2004, he was appointed as a

Director and the chairman of the Board. Since 2007, he has been the party committee deputy

secretary of Yankuang Group and the chairman of Yankuang Xinjiang Neng Hua Company

Limited. He was graduated from China University of Mining and Technology. Save as

disclosed above, Mr. Wang does not have any other position in any other companies of the

Group.

For the year ended 31 December 2007, Mr. Wang Xin had not received any

remuneration from the Company in respect of his services as an executive Director of the

Company.

GENG Jiahuai, aged 57, a researcher in engineering technique application, is the Vice

Chairman of the Board of the Company and at the same time the Chairman of the board of

directors and the Party Committee Secretary of Yankuang Group. During the period from

1985 to 2002, Mr. Geng successively acted as the deputy director of Zibo Mining Bureau,

the head of the Zibo Safety and Supervision Bureau and the director general of Zibo Mining

Bureau. Mr. Geng joined Yankuang Group in 2002 and became the general manager, the vice

chairman of the board of directors and the party committee deputy secretary of Yankuang

Group. Mr. Geng was appointed the chairman of the board of the directors and the party

committee secretary of Yankuang Group in 2003. Mr. Geng became a director of the

Company in 2002 and the vice chairman of the Company in 2004. He was graduated from

Shandong Mining Institute. Save as disclosed above, Mr. Geng does not have any other

position in any other companies of the Group.

For the year ended 31 December 2007, Mr. Geng Jiahuai had not received any

remuneration from the Company in respect of his services as an executive Director of the

Company.

YANG Deyu, aged 59, a researcher in engineering technique application, is the Vice

Chairman of the Board and the General Manager of the Company. He is also a director of

the board of Yankuang Group, and the vice chairman of Yankuang Xinjiang Neng Hua

deputy director of Yanzhou Mining Bureau in 1994, and the deputy general manager of the

also the Director of Yanmei Heze Nenghua Company Limited, the Chairman of Yanzhou

Coal Yulin Neng Hua Company Limited, a Director of Yancoal Australia Pty Limited and a

Director of Austar Coal Mine Pty Limited. Mr. Yang was appointed as an executive director

and the general manager of the Company in 1997 and the vice chairman of the Board and

the general manager of the Company in 2002. Mr. Yang was appointed as a director of

Yankuang Group in 2004 and was appointed as the vice chairman of Yankuang Xinjiang

Neng Hua Company Limited in 2007. He was graduated from Shandong Mining Institute.

Save as disclosed above, Mr. Yang does not have any other position in any other companies

of the Group.

For the year ended 31 December 2007, Mr. Yang had not received any remuneration

from the Company in respect of his services as an executive Director of the Company.

As at the Latest Practicable Date, Mr. Yang had a long position in 20,000 domestic

shares of the Company, within the meaning of Part XV of the Securities and Futures

Ordinance.

SHI Xuerang, aged 53, a senior engineer, is a Director of the Company and Deputy

General Manager of Yankuang Group. From 2001 to 2003, Mr. Shi acted as the deputy

general manager of Xinwen Coal Mining Group Company Limited. He joined Yankuang

Group as a deputy general manager in 2003 and was appointed a Director of the Company

in 2005. He graduated from Shandong Mining Institute. Save as disclosed above, Mr. Shi

does not have any other position in any other companies of the Group.

For the year ended 31 December 2007, Mr. Shi Xuerang had not received any

remuneration from the Company in respect of his services as an executive Director of the

Company.

CHEN Changchun, aged 55, a senior accountant, is a Director of the Company and a

Director, the Chief Accountant, the Chief Legal Advisor of Yankuang Group and a Director

predecessor in 1984 and became the chief accountant and a director of Yankuang Group in

1998 and 2004, respectively. Mr. Chen was appointed as a director of the Company in 2005

and was appointed as the chief legal advisor of Yankuang Group in 2006 and a director of

Yankuang Xinjiang Neng Hua Company Limited in 2007. He was graduated from Beijing

Coal Cadre Institute. Save as disclosed above, Mr. Chen Changchun does not have any other

position in any other companies of the Group.

For the year ended 31 December 2007, Mr. Chen Changchun had not received any

remuneration from the Company in respect of his services as an executive Director of the

Company.

WU Yuxiang, aged 46, a senior accountant, is a Director and the Chief Financial

became the manager of the finance department of the Company in 1997, and was appointed

as a director and the chief financial officer of the Company in 2002. Mr. Wu is also a

Director of Yanmei Heze Nenghua Company Limited, a Director of Yanzhou Coal Shanxi

Neng Hua Company Limited, a Director of Yanzhou Coal Yulin Neng Hua Company

Limited, a Director of Yancoal Australia Pty Limited, a Director of Austar Coal Mine Pty

Limited. Since 2007, he is also the chairman of the supervisory committee of Huadian

Zouxian Power Generation Company Limited. He was graduated from Shandong TV

University. Save as disclosed above, Mr. Wu does not have any other position in any other

companies of the Group.

For the year ended 31 December 2007, the total remuneration of Mr. Wu as a Director

of the Company was RMB206,000.

As at the Latest Practicable Date, Mr. Wu had a long position in 20,000 domestic

shares of the Company, within the meaning of Part XV of the Securities and Futures

Ordinance.

WANG Xinkun, aged 55, a senior economist, is a Director and the Deputy General

became a manager of the coal transportation and sales department of the Company in 2000,

and a deputy general manager of the Company in 2002. He became a Director of the

Company in 2004. He is also a director of Yanzhou Coal Shanxi Neng Hua Company

Limited and a director of Shandong Yanmei Shipping Co., Ltd. Since 2007, he is also the

vice-chairman of Huadian Zouxian Power Generation Company Limited. He graduated from

Tianjin University. Save as disclosed above, Mr. Wang does not have any other position in

any other companies of the Group.

For the year ended 31 December 2007, the total remuneration of Mr. Wang Xinkun as

an executive Director of the Company was RMB235,000.

ZHANG Baocai, aged 40, a senior accountant, is a director and the board secretary of

the head of the planning and finance department of the Company in 2002. He was appointed

a director, the board secretary, the head of the Secretariat of the Board and the head of the

Information Management Department of the Company in 2006. He is also a Director of

Yancoal Australia Pty Limited and a Director of Austar Coal Mine Pty Limited. Mr. Zhang

graduated from Nankai University. Save as disclosed above, Mr. Zhang does not have any

other position in any other companies of the Group.

For the year ended 31 December 2007, the total remuneration of Mr. Zhang Baocai as

a Director and secretary to the board of the Company was RMB205,000.

The term of appointment of each of Mr. Wang Xin, Mr. Geng Jiahuai, Mr. Yang Deyu,

Mr. Shi Xuerang, Mr. Chen Changchun, Mr. Wu Yuxiang, Mr. Wang Xinkun and Mr. Zhang

Baocai will expire at the forthcoming AGM and each of them has offered himself for

re-appointment.

As far as the Directors are aware and save as disclosed above, each of Mr. Wang Xin,

Mr. Geng Jiahuai, Mr. Yang Deyu, Mr. Shi Xuerang, Mr. Chen Changchun, Mr. Wu Yuxiang,

Mr. Wang Xinkun and Mr. Zhang Baocai did not hold any directorships in other public listed

companies in the last three years. Save as disclosed above, each of them does not have any

relationship with any other Directors, supervisors, senior management or substantial or

controlling shareholders of the Company, nor does each of them have any interests in the

Shares of the Company within the meaning of Part XV of the Securities and Futures

Ordinance.

In relation to the re-appointment of each of Wang Xin, Geng Jiahuai, Yang Deyu, Shi

Xuerang, Chen Changchun, Wu Yuxiang, Wang Xinkun and Zhang Baocai as Directors of

the Company, there is no other information which is discloseable pursuant to any of the

requirements set out in Rule 13.51(2) of the Hong Kong Listing Rules nor are there any

other matters that need to be brought to the attention of Shareholders.

Wang Xin, Mr. Geng Jiahuai, Mr. Yang Deyu, Mr. Shi Xuerang, Mr. Chen Changchun, Mr.

Wu Yuxiang, Mr. Wang Xinkun and Mr. Zhang Baocai will enter into a service contract with

the Company commencing from the conclusion of the AGM and ending on the conclusion of

the 2010 annual general meeting of the Company.

At the 16th meeting of the third session of the Board held on 18 April 2008, it was

proposed that conditional upon achieving the operational targets of the Company for the year

including Mr. Wu Yuxiang, Mr. Wang Xinkun and Mr. Zhang Baocai, shall be determined at

the amount representing an increment of 8% of the average remuneration of the executive

Directors of the Company for the year 2007. In determining the remuneration of Mr. Wu

Yuxiang, Mr. Wang Xinkun and Mr. Zhang Baocai for the year ending 31 December 2008,

Group as well as the prevailing market rate will also be taken into account. For the

December 2007, they shall not receive any remuneration for the year 2008.

PU Hongjiu, aged 71, professor-level senior engineer, is an independent non-executive

Director of the Company. He is the first vice chairman of the China Coal Industry

Association and the chairman of Coal Industry Association of China International

Association. Mr. Pu was a party group member and the head of disciplinary inspection unit

of the State Administration of Work Safety and State Administration of Coalmine Safety in

2001. He has been the chairperson of China Coal Academy since 2001 and the first

vice-chairman of the China Coal Industry Association since 2003. He became an

independent non-executive director of the Company in 2005. He graduated from Hefei

Mining Institute. He is also an independent non-executive director of Shanghai Datun

Energy Company Limited and Shenhua Ningxia Coal Mining Group Corporation Limited,

respectively. Save as disclosed above, Mr. Pu does not have any other position in any other

companies of the Group.

For the year ended 31 December 2007, the total remuneration of Mr. Pu Hongjiu as a

Director of the Company was RMB96,000.

ZHAI Xigui, 65 years old, senior auditor. Mr. Zhai is the Chairman of China Audit

Association. Mr. Zhai was appointed as the chief auditor and deputy secretary of the party

committee of China Audit Ministry in 1999. In 2003, he was appointed as a member of the

China Audit Association. Mr. Zhai graduated from the Central Institute of Finance and

Banking. Save as disclosed above, Mr. Zhai does not have any other position in any other

companies of the Group.

LI Weian, 51 years old, a doctor of management and economics, a professor of Nankai

University. Mr. Li is an independent non-executive director of Offshore Oil Engineering Co.,

Ltd. He is the Dean of Nankai University Commercial College, Director of the Corporate

Governance Research Centre, a member of the Academic Subject Assessment Unit of the

Academic Degrees Committee of the State Council, a deputy director of the Business

Administration Guidance Committee of the Ministry of Education, and enjoys government

allowance. Mr. Li was appointed as the Dean of Nankai University Commercial College in

1997, and appointed as the first liberal Changjiang scholar in 2006. In addition, Mr. Li was

an independent non-executive director of Shanxi Guoyang New Energy Co., Ltd. from 2003

to 2006. Mr. Li graduated from Nankai University and Keio University. Save as disclosed

above, Mr. Li does not have any other position in any other companies of the Group.

WANG Junyan, 37 years old, a doctor of finance. Mr. Wang is the Chairman and Chief

Investment Officer of China Shenghai Investment Management Company Ltd., Chief

Investment Supervisor of CITIC Securities International Investment (HK) Limited. Mr. Wang

was the managing director of First Shanghai Financial Holdings Limited in 1997. In 2007,

he was appointed as the chairman and chief investment officer of China Shenghai

Investment Management Company Ltd. Besides, he also served as an independent

non-executive director of Livzon Pharmaceutical Group Inc. and an independent

non-executive director of China Aerospace International Holdings Limited. Mr. Wang

graduated from Hong Kong University. Save as disclosed above, Mr. Wang does not have

any other position in any other companies of the Group.

Mr. Pu Hongjiu, whose term of appointment expires at the forthcoming AGM, has

offered himself for re-appointment. The proposed appointment of Mr. Zhai Xigui, Mr. Li

Weian and Mr. Wang Junyan are to replace Mr. Cui Jianmin, Mr. Wang Xiaojun and Mr.

Wang Quanxi who will retire at the conclusion of the forthcoming AGM.

As far as the Directors are aware and save as disclosed above, each of Mr. Pu Hongjiu,

Mr. Zhai Xigui, Mr. Li Weian and Mr. Wang Junyan did not hold any directorships in other

public listed companies in the last three years. Save as disclosed above, each of them does

not have any relationship with any other Directors, supervisors, senior management or

substantial or controlling shareholders of the Company, nor does each of them have any

interests in the Shares of the Company within the meaning of Part XV of the Securities and

Futures Ordinance.

The Company has received a confirmation of independence from each of Mr. Pu

Hongjiu, Mr. Zhai Xigui, Mr. Li Weian and Mr. Wang Junyan pursuant to Rule 3.13 of the

Hong Kong Listing Rules and on this basis, the Company considers them to be independent.

The average remuneration of the independent non-executive Director in 2007 was

RMB100,500. At the 16th meeting of the third session of the Board held on 18 April 2008,

it was proposed that conditional upon achieving the operational targets of the Company for

independent non-executive Directors of the Company shall be determined at the amount

representing an increment of 8% of the average remuneration of the independent

non-executive Directors of the Company for the year 2007. The Company will also take into

consideration the operational conditions of the Company, the respective duties and

responsibilities of the independent non-executive Directors as well as the prevailing market

rate in determining their remuneration.

each of Pu Hongjiu, Zhai Xigui, Li Weian and Wang Junyan will enter into a service

contract with the Company commencing from the conclusion of the AGM and ending on the

conclusion of the 2010 annual general meeting of the Company.

In relation to the re-appointment of Pu Hongjiu and the new appointments of each of

Zhai Xigui, Li Weian and Wang Junyan as independent non-executive Directors of the

Company, there is no other information which is discloseable pursuant to any of the

requirements set out in Rule 13.51(2) of the Hong Kong Listing Rules nor are there any

other matters that need to be brought to the attention of Shareholders.

SONG Guo, aged 53, a senior administrative officer, is the Vice Chairman of the

Supervisory Committee of the Company and a Deputy Secretary of the Party Committee of

Yankuang Group. In 2002, Mr. Song was the officer-in-charge of the office of Coal

Management Bureau of Shandong Province. He joined Yankuang Group in 2003 and was the

secretary of the disciplinary inspection committee from 2003 to 2007. He became a deputy

secretary of the party committee of Yankuang Group in 2004 and the vice-chairman of the

supervisory committee of the Company in 2005. He graduated from Shandong University.

Save as disclosed above, Mr. Song does not have any other position in any other companies

of the Group.

For the year ended 31 December 2007, Mr. Song Guo had not received any

remuneration from the Company in respect of his services as a Supervisor of the Company.

As at the Latest Practicable Date, Mr. Song Guo had a long position in 1,800 domestic

shares of the Company, within the meaning of Part XV of the Securities and Futures

Ordinance.

ZHOU Shoucheng, aged 56, professor-level senior administrative officer, the Secretary

of the Disciplinary Inspection Committee and the Chairman of the Labor Union of Yankuang

2002, Mr. Zhou successively acted as the secretary of Youth League Committee of

Xinglongzhuan Coalmine, the secretary of Youth League Committee of Yankuang Group, the

secretary of the party committee of Beixu Coalmine, the secretary of the party committee

and the deputy head of Xinglongzhuang coalmine. He became the chairman of the Labor

Union of Yankuang Group in 2002 and the secretary of the Disciplinary Inspection

Committee of Yankuang Group in 2007. He graduated from Shandong Coalmine Cadre

Institute. Save as disclosed above, Mr. Zhou does not have any other position in any other

companies of the Group.

ZHANG Shengdong, aged 51 is a senior accountant, a Supervisor of the Company. He

is also the Deputy Chief Accountant and the Head of the Finance Department and the

predecessor in 1981 and became the deputy chief accountant in 1997. He became a

supervisor of the Company and the head of the finance company preparatory office of

Yankuang Group in 2002. Mr. Zhang was appointed as the Head of the Finance Department

of Yankuang Group in 2006. He is also the chairman of the supervisory committee of

Yanzhou Coal Shanxi Neng Hua Company Limited. He graduated from China University of

Mining and Technology. Save as disclosed above, Mr. Zhang does not have any other

position in any other companies of the Group.

For the year ended 31 December 2007, Mr. Zhang Shengdong had not received any

remuneration from the Company in respect of his services as a Supervisor of the Company.

ZHEN Ailan, aged 51, is a senior accountant and a senior auditor, the Deputy Chief of

1980. She became the Deputy Chief of Auditing Office of Yankuang Group in 2002 and the

Deputy Chief of auditing Department of Yankuang Group in 2005. Ms. Zhen was graduated

from the Northeastern Finance and Economics University. Save as disclosed above, Ms.

Zhen does not have any other position in any other companies of the Group.

each of Song Guo, Zhou Shoucheng, Zhang Shengdong, Zhen Ailan will enter into a service

contract with the Company commencing from the conclusion of the AGM and ending on the

conclusion of the 2010 annual general meeting of the Company. The supervisors of the

Company to be elected by the Shareholders comprising Song Guo, Zhou Shoucheng, Zhang

Shengdong, Zhen Ailan will not receive any remuneration from the Company for the year

ending 31 December 2008.

As far as the Directors are aware and save as disclosed above, each of Song Guo, Zhou

Shoucheng, Zhang Shengdong, Zhen Ailan did not hold any major office in other public

listed companies in the last three years. Save as disclosed above, each of them does not

have any relationship with any other Directors, supervisors, senior management or

substantial or controlling shareholders of the Company, nor does each of them have any

interests in the Shares of the Company within the meaning of Part XV of the Securities and

Futures Ordinance.

In relation to the each of the re-appointments of Mr. Song Guo and Mr. Zhang

Shengdong and the new appointments of each of Mr. Zhou Shoucheng and Ms. Zhen Ailan

as Supervisors of the Company, there is no other information which is discloseable pursuant

to any of the requirements set out in Rule 13.51(2) of the Hong Kong Listing Rules nor are

there any other matters that need to be brought to the attention of Shareholders.