Yanzhou Coal Mining, the listed flagship of China's fourth largest producer of the fuel, Yankuang Group, aims to complete an acquisition either overseas or on the mainland this year to help lift sagging sales volume. The company has been in talks to buy into companies including Australian coal miner Felix Resources and domestic ones in Guizhou province and the autonomous regions of Inner Mongolia and Xinjiang, said chief financial officer Wu Yuxiang. Earlier media reports suggested the potential bid for Felix could be more than A$3 billion (HK$16.61 billion). Yanzhou is seeking to grow by acquisitions, as it faced output declines in recent years owing to problems in requisition of farmland for mining. Slow progress in investment talks on the Yushuwan project in Shaanxi province was also to blame, as the project could initially add 8 million tonnes of annual output, rising to 20 million tonnes in five years. An agreement has not been reached with the provincial government and partner Sino Biopharmaceutical even though the mine has been ready for production for more than two years. Sino Biopharmaceutical chairman Tse Ping said the government had not agreed to the company's request to lower the cash injection in response to a sharp fall in coal prices. The project could substantially boost Yanzhou sales, which are targeted at 35.05 million tonnes, down 6.7 per cent from actual delivery of 37.56 million tonnes last year. Yanzhou's share price declined 5.8 per cent yesterday to HK$7.12, after it unveiled on Sunday 100.9 per cent net profit growth to 6.48 billion yuan (HK$7.36 billion) last year, 13.1 per cent short of the 7.47 billion yuan mean estimate of 25 analysts polled by Thomson Reuters. Separately, rival China Coal Energy posted a 3.62 per cent year-on-year fall in first-quarter net profit to 1.86 billion yuan after booking a 641.6 million yuan loss on the value decline in its China Cosco A shares and a 68.44 million gain on the sale of 40 million China Cosco shares.