The central government has allowed mainland coal producers to renegotiate their sales contracts signed with power companies this year, in an effort to avert a power crisis after many of them broke their agreements amid soaring prices.
Yanzhou Coal Mining chief financial officer Wu Yuxiang told analysts yesterday that the Hong Kong-listed firm had been advised by the National Development and Reform Commission (NDRC) that it could renegotiate its sales contracts.
The market had earlier speculated that coal producers would face a cap on price increases of future coal sales.
Mr Wu said the NDRC directive would affect only one-year contracts signed for delivery this year but which had not yet been delivered.
The directive would not affect spot market sales or next year's sales.
The August 3 directive will be limited to the main coal-producing provinces of Henan, Anhui, Shandong, Shanxi and Shaanxi. It will affect only coal sold to power firms.
Coal companies will be allowed to raise prices by up to 8 per cent under the revised terms.