Shanxi Lu'an Environmental Energy Dev.Co., Ltd. said it aims to keep raw coal output above 50 million tonnes over the medium to long term, relying on stable production at existing mines and capacity releases from new projects.

The company said at its first-half 2026 results briefing on September 10 that short-term PCI coal capacity is constrained by approved capacity at existing mines, while medium- to long-term growth depends on new projects including the Shangma and Yaojiashan mines. Combined with steady output at existing mines, this will gradually expand PCI coal supply.

It cautioned that resource conversion and construction at projects including the Sucun exploration right and the Shangma mine are subject to approvals and construction timelines, leaving the timing of commissioning and returns uncertain.

On recent mine suspensions in Shanxi amid safety inspections, the company said it strictly implements work safety requirements and makes every effort to ensure stable output at its mines while remaining compliant.

The company said its medium- to long-term operating target is raw coal output of more than 50 million tonnes, to be achieved through stable production at existing mines and capacity releases from new mines, though final output is subject to safety regulation, project approval progress and resource conditions.

On long-term contract performance and pricing, Lu'an Environmental Energy said the fulfillment rate for long-term contracts remained high in the first half. Long-term contract prices are set in strict accordance with national and Shanxi provincial policies on thermal coal long-term contracts, and the company will follow new rules if the government adjusts pricing.

For PCI coal specifically, long-term contract prices are typically adjusted monthly, and the share of long-term contracts will be dynamically adjusted based on market conditions and customer demand.

The company also noted that the PCI coal market includes multiple grades with differences in specifications, costs and transportation. Demand is closely tied to steel production schedules and blast furnace injection ratios. Future prices depend on macroeconomic demand, steel mill profitability and coal supply, among other factors, and carry volatility risk. The company said it will conduct market analysis and flexibly adjust sales strategies, leveraging its high-quality PCI coal products and stable customer base to optimize supply and enhance competitiveness.

Lu'an Environmental Energy said its raw coal output and commercial coal sales fell year on year in the first half due to special safety governance and phased maintenance at some mines. However, revenue maintained steady growth on rising coal market prices and the company's efforts to adjust its product mix and increase the share of higher-value PCI coal.

In chemicals, the company's coking segment remained loss-making in the first half due to coke market prices and other factors. It said it continues to optimize production, strictly control costs and actively improve operations, and will manage operations in line with market changes. It added that it will study opportunities to extend the coking industrial chain based on industry conditions, technical feasibility and economic returns.

On the continued rise in accounts receivable, Lu'an Environmental Energy said its customers are mainly large domestic steel and power enterprises with generally sound credit quality, and the increase reflects a phased lengthening of settlement cycles. The company has strengthened tiered customer credit management, implemented collection assessments, optimized settlement terms, strictly controlled credit sales, regularly assessed bad debt risk and made adequate bad debt provisions.

On liabilities, the company said its debt-to-asset ratio stands at 41.28%, within a healthy range for the coal industry, with a reasonable mix of short- and long-term debt and manageable repayment pressure. Capital expenditure in the second half will target safety upgrades, intelligent construction and acquisition of reserve resources. As new projects advance, short-term interest-bearing debt may rise slightly, and the company will coordinate cash flow to keep debt levels stable.

Lu'an Environmental Energy said it will focus on work safety, optimizing its product mix, cost reduction and efficiency gains, and advancing key projects in the second half.

The company said its core advantages include: stable PCI coal product quality and strong coal type adaptability, with high recognition among steel customers; deep regional resource deployment and continuous reserve of high-quality coal sources to ensure medium- to long-term feedstock supply; and mature production organization and sales operations with a stable customer structure. It said it will continue to consolidate its product and resource advantages and operate prudently.