China Coal Energy : CONNECTED TRANSACTION-ESTABLISHMENT OF A JOINT VENTURE

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(A joint stock company incorporated in the People's Republic of China with limited liability)

(Stock Code: 01898)

CONNECTED TRANSACTION

ESTABLISHMENT OF A JOINT VENTURE

The Board is pleased to announce that on 28 August 2020 Pingshuo Group (a subsidiary of the Company) entered into the Joint Venture Agreement with China Coal Electricity (a subsidiary of China Coal Group). According to the Joint Venture Agreement, the parties agreed to establish Antaibao Thermal Power Company for the construction and operation of the Antaibao Thermal Power Project. Antaibao Thermal Power Company with a registered capital of RMB960,000,000 is held as to 51% and 49% by Pingshuo Group and China Coal Power respectively and is a subsidiary of the Company.

As at the date of this announcement, China Coal Group holds 58.36% of equity interest in the Company and is the controlling shareholder and a connected person of the Company; China Coal Electricity is a wholly-owned subsidiary of China Coal Group and is therefore an associate of China Coal Group and a connected person of the Company under the Hong Kong Listing Rules. Accordingly, the transaction of establishing a joint venture under the Joint Venture Agreement constitutes a connected transaction of the Company under Chapter 14A of the Hong Kong Listing Rules.

As one or more of the applicable percentage ratios (as defined under Rule 14.07 of the Hong Kong Listing Rules) in relation to the transaction of establishing a joint venture under the Joint Venture Agreement exceed 0.1% but below 5%, such transaction is subject to the reporting and announcement requirements but is exempted from shareholders' approval requirement under Chapter 14A of the Hong Kong Listing Rules.

1. INTRODUCTION
   The Board is pleased to announce that on 28 August 2020 Pingshuo Group (a subsidiary of the Company) entered into the Joint Venture Agreement with China Coal Electricity (a subsidiary of China Coal Group). According to the Joint Venture Agreement , the parties agreed to establish Antaibao Thermal Power Company for the construction and operation of the Antaibao Thermal Power Project. Antaibao Thermal Power Company with a registered capital of RMB960,000,000 is held as to 51% and 49% by Pingshuo Group and China Coal Power respectively and is a subsidiary of the Company.

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1. MAJOR TERMS OF THE JOINT VENTURE AGREEMENT

Date:		28 August 2020
Parties:		(1) Pingshuo Group; and
		(2)	China Coal Electricity
Name of	the joint	China Coal Pingshuo Antaibao Thermal Power
venture:		Company Limited*（中煤平朔安太堡熱電有限公
		司）(subject to approval of the business registration
		department)
Registered	Capital	The registered capital of Antaibao Thermal Power
and Contribution:	Company is RMB 960,000,000, of which Pingshuo
		Group contributes RMB489,600,000 and represents
		51% of the registered capital while China Coal
		Electricity	contributes	RMB470,400,000	and
		represents 49% of the registered capital.
		The registered capital is paid in installments. The first
		phase of the registered capital is RMB 500,000,000, of
		which Pingshuo Group contributes RMB255,000,000
		and China Coal Electricity contributes RMB
		245,000,000, which will be paid in cash (RMB) within
		one month after the execution of the Joint Venture
		Agreement. The subsequent registered capital will be
		injected in installments according to the project
		construction progress, and will be settled by Pingshuo
		Group with its completed investment to the Antaibao
		Thermal Power Project based on the market appraised
		value with the outstanding part made up in cash if
		applicable, and settled by. China Coal Electricity in
		cash.
Scope of Business of	Thermal power generation, power supply; sales of
the Joint Venture:	mechanical and electrical equipment; thermal power
		production and sales; comprehensive utilization of ash
		and slag; sales of steam, ash and demineralized water;
		distribution and sales of electricity; trading of coal and
		diesel; power technology training; renewable energy
		and other energy project investment business and
		consulting business, etc. (projects that are subject to
		approval in accordance with the law can be operated
		only after being approved by relevant departments).
Scale of Business:	Construction and operation of Antaibao Thermal
		Power Project; investment in the expansion of
		Antaibao Power Plant or building a new supporting
		project with the main business of the power plant in
		the administrative area of Shuozhou City according to
		the	company's situation	and market needs,	and
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carrying out the business of purchasing and selling electricity according to the company's business needs at the same time.

1. REASONS FOR AND BENEFITS OF ESTABLISHING A JOINT VENTURE
   To promote the consumption and utilization of low-quality coal and coal gangue in the mining area of Pingshuo, Pingshuo Group and China Coal Electricity established Antaibao Thermal Power Company for the construction of Antaibao Thermal Power Project. This will help exploit the respective advantages of Pingshuo Group and China Coal Power, promote professional management of the power industry and achieve coordinated development, which is in line with the interest of the Company and its shareholders as a whole.

IV. GENERAL INFORMATION

China Coal Group

China Coal Group is a state-owned enterprise established under the laws of the PRC and is the controlling shareholder of the Company. It directly and indirectly holds approximately 58.36% of the issued share capital of the company as at the date of this announcement. The major businesses of China Coal Group include the production and trade of coal, coal chemical business, pithead power generation, coal mining equipment manufacturing and related engineering technical services. The ultimate controller of China Coal Group is the SASAC.

China Coal Electricity

China Coal Electricity is a limited liability company incorporated in the PRC and a wholly-owned subsidiary of China Coal Group. China Coal Electricity is principally engaged in wind power generation; engineering design; technology development, technical consultation and technology promotion; research and development of energy recovery system; engineering management services; energy management contract services; power supply.

Pingshuo Group

Pingshuo Group is a limited liability company incorporated in the PRC and a wholly- owned subsidiary of the Company. Pingshuo Group is principally engaged in mining and sales of coal, power production, production and sales of coal chemical products, etc.

1. HONG KONG LISTING RULES IMPLICATIONS

As at the date of this announcement, China Coal Group holds 58.36% of equity interest in the Company and is the controlling shareholder and a connected person of the Company; China Coal Electricity is a wholly-owned subsidiary of China Coal Group and is therefore an associate of China Coal Group and a connected person of the Company under the Hong Kong Listing Rules. Accordingly, the transaction of establishing a joint venture under the Joint Venture Agreement constitutes a connected transaction of the Company under Chapter 14A of the Hong Kong Listing Rules.

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As one or more of the applicable percentage ratios (as defined under Rule 14.07 of the Hong Kong Listing Rules) in relation to the transaction of establishing a joint venture under the Joint Venture Agreement exceed 0.1% but below 5%, such transaction is subject to the reporting and announcement requirements but is exempted from shareholders' approval requirement under Chapter 14A of the Hong Kong Listing Rules.

VI. DIRECTOR'S CONFIRMATION

As Mr. Li Yanjiang, Mr. Peng Yi, Mr. Du Ji'an and Mr. Zhao Rongzhe are also Directors or senior management of China Coal Group, they are deemed to be materially interested in the transaction under the Joint Venture Agreement and have therefore abstained from voting on the resolutions in respect to the Joint Venture Agreement at the Board meeting. Save for the above, none of the other Directors has a material interest in the transaction under the Joint Venture Agreement .

The Directors (including the independent non-executive Directors) are of the view that the Joint Venture Agreement is entered into on normal commercial terms, and the transaction thereunder is a normal business practice, the terms and conditions therein are fair and reasonable and in the interests of the Company and its shareholders as a whole.

VI. DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions have the following meanings:

"Antaibao	Thermal	Power	China Coal Pingshuo Antaibao Thermal Power
Company"			Company Limited*（中煤平朔安太堡熱電有
			限公司）
"Antaibao	Thermal	Power	2×350MW low calorific value coal thermal
Project"			power project of Antaibao located in Antaibao
			Open Pit Mine Square, Pingshuo, Pinglu
			District, Shuozhou City, Shanxi Province with
			proposed establishment of a 2×350MW
			supercritical direct air-cooled extraction
			condensing steam turbine generating unit
"connected person"		has the meaning ascribed to it under the Hong
			Kong Listing Rules
"Board"			the board of Directors of the Company
"China Coal Electricity"		China Coal Electricity Company Limited* (中
			煤電力有限公司), a joint stock company
			incorporated in the PRC with limited liability
			and a wholly-owned subsidiary of China Coal
			Group
"Company"			China Coal Energy Company Limited, a joint
			stock company incorporated in the PRC with
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	limited liability, the H shares of which are
	listed on the Stock Exchange under the stock
	code of 01898 and the A Shares of which are
	listed on the Shanghai Stock Exchange under
	the stock code of 601898
"connected person(s)"	has the meaning ascribed to it under the Hong
	Kong Listing Rules
"connected transaction(s)"	has the meaning ascribed to it under the Hong
	Kong Listing Rules
"Director(s)"	the director(s) of the Company
"Group"	the Company and other subsidiaries
"Hong Kong Listing Rules"	the Rules Governing the Listing of Securities
	on the Hong Kong Stock Exchange
"Hong Kong Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Joint Venture Agreement"	the Joint Venture Agreement for China Coal
	Pingshuo Antaibao Thermal Power Company
	Limited dated 28 August 2020 and entered into
	between Pingshuo Group and China Coal
	Electricity, pursuant to which the parties
	agreed to establish Antaibao Thermal Power
	Company in Pinglu Economic and
	Technological Development	Zone,	Shuozhou
	City, Shanxi Province
"China Coal Group"	China National Coal Group Corporation, a
	state-owned enterprise incorporated in the
	PRC and the controlling shareholder of the
	Company
"Pingshuo Group"	China Coal Pingshuo Group Company
	Limited, a joint stock company incorporated in
	the PRC with limited liability and a wholly-
	owned subsidiary of the Company
"SASAC"	the State-owned Assets Supervision and
	Administration Commission	of	the State

Council, a special organization directly subordinated to the State Council, and is mainly responsible for supervising the state- owned assets of enterprises under the supervision of the Central Government (excluding financial enterprises) and the reservation and increment of the value of the assets and other issues

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By Order of the Board

China Coal Energy Company Limited

Li Yanjiang

Chairman and Executive Director

Beijing, the PRC

28 August 2020

As at the date of this announcement, the executive directors of the Company are Li Yanjiang and Peng Yi; the non-executive directors of the Company are Du Ji'an, Zhao Rongzhe and Xu Qian; and the independent non-executive directors of the Company are Zhang Ke, Zhang Chengjie and Leung Chong Shun.

* For identification purpose only

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