Yanzhou Coal Mining Co - the mainland's first coal mining firm to seek an overseas listing - has lowered the issue price of H-share offering next week after the flotation was postponed last year due to poor market conditions. The flotation is this year's maiden H-share offering and will be closely monitored by other candidates such as Wuhan Iron and Steel, which was also forced to shelve its share sale because of the sluggish market. The Shandong-based firm will raise up to $2.21 billion through a dual listing in Hong Kong and the United States. New World Development and China Everbright Holdings, which originally agreed to take a strategic stake in Yanzhou Coal, will not purchase any shares. Officials representing Yanzhou Coal will meet analysts and fund managers in Hong Kong on Monday to kick off the offering. The firm will issue 820 million shares priced between $2.18 and $2.70, or between 6.25 and 7.75 times this year's prospective earnings, a banker close to the deal said. This is lower than the previous range of between $2.73 and $3.49, or 8.1 and 10.35 times last year's estimated earnings. 'The main driving force to take the deal forward is strong investor interest in the company revealed during the soft marketing,' the banker said. He said the proposed price range reflected both investor feedback and the company's quality. Considering the low valuation, analysts said the stock would prove appealing compared with an multiple of about 13 times earnings on other H shares. Only 82 million shares will be sold in the Hong Kong public offering which will run from March 24 to 27. The final issue price will be fixed on March 27. The remainder, in the form of American Depositary Receipts, will be split equally between a US offering and an international placement. The flotation is sponsored by Bear Stearns & Co and ABN-Amro Rothschild. Yanzhou Coal owns and operates five mines in Shandong, including Jining II which it bought from its parent in January for about two billion yuan (HK$1.86 billion). Jining II is scheduled to reach its designed annual capacity of four million tonnes of raw coal by 2000. The company has also been granted exclusive rights to buy from its parent a sixth mine - Jining III - with a designed capacity of five million tonnes. It will begin commercial production next year. Last year, Yanzhou Coal had raw coal production of 16.9 million tonnes.