Notice on Summary of 2019 coal production and demand contracts

All relevant units，

In order to implement the Notice on Doing a Good Job in the Signing and Performing of Medium and Long-Term Coal Contracts in 2019, which was issued by the General Office of the National Development and Reform Commission, and ensure the summary of contracts of connection between coal production and demand in 2019, the 2019 coal contracts will be summarized from now on. And the relevant matters are hereby notified as follows:

1. Relevant units should actively and steadily do a good job in connection between coal production and demand in 2019.

Coal enterprises should proceed from the overall situation of promoting the stable operation of the industry, scientifically analyzing the supply and demand situation, reasonably determining the total coal supply in 2019 according to changes in market demand, actively connecting with users, and focus on long-term cooperation to establish a long-term, stable, honest and efficient strategy partnerships.

Coal enterprises should be actively engaged with users to encourage the supply and demand parties to sign medium- and long-term contracts with relatively fixed quantity and clear price mechanism for two years and above, encouraging continuous innovation in connection methods, and sign medium- and long-term coal direct purchase and sales contracts and three-party contracts with transportation capacity guarantee as early as possible, as more as possible and solidly. Among them, the number of medium and long-term contracts signed by the central, provincial and municipal coal enterprises and other enterprises and groups above designated size should reach more than 75% of their own resources, and should not be lower than that of last year.

The coal industry management departments of all provinces (autonomous regions) are requested to assist our association in doing a good job in the summary of coal contract of the region, urging the coal enterprises to actively carry out the connection work between coal production and demand, and strengthen the coordination of the local coal enterprises' connection work in the region. In order to make the work more orderly, please feedback the progress and existing problems of the connection work to us.

2. Relevant units should continue to promote the use of the model text of Coal Purchase and Sales Contracts.

In order to promote the better performance of the contracts, the supply and demand enterprises are encouraged to sign the contracts according to the model text of Coal Purchase and Sales Contracts that recommended by our association. The quantity, quality, and liability for breach and other contents of the contracts should be standardized, true and effective, and should not be divorced from the actual production and the existing transportation capacity of railway and port, and should not increase the purchase cost of power enterprises and other users by illegally bundled signing.

The contract terms in the model text of Coal Purchase and Sales Contracts can be adjusted according to the wishes of both parties. The online contract entry system offers the contract clause customization function, and the enterprises can customize or modify the contract terms according to their own needs.

3.  The summary work of coal production and demand contracts in 2019 .

The connection contracts of coal production and demand in 2019 are uniformly entered and summarized by the coal enterprises in the contract summary system of China Coal Market network (www.cctd.com.cn).

The online summary of the connection contracts of coal production and demand in 2019 will be launched from now on. It is tentatively scheduled to end at 24 o'clock on December 14, 2018. Coal enterprises that have completed the production and demand connection should log in and summarize the contracts online as soon as possible. In principle, transportation capacity will not be reserved for those who have not completed the signing of purchase and sales contracts and entered into the network system within the specified time.

In order to strengthen the railway transportation security and realize the organic combination of coal transportation demand and railway power resources, coal enterprises should submit the transportation capacity demand according to the proportion of the actual railway outward transportation volume of the enterprise in 2018 and do not exceed 110% of the proposed capacity.

After summarizing the contracts entered by coal enterprises, the association will submit them to the National Development and Reform Commission and China Railway for connection and implementation of transportation capacity.

The National Development and Reform Commission will strengthen guidance with relevant parties, focusing on the supervision of medium and long-term contracts for coal of 200 thousand tons and above, implementing monthly statistics and quarterly assessment on contract performance, entrusting third-party credit institutions to collect performance credit data of medium and long-term contracts , establishing dynamic credit record, and timely release the performance of credit standing. All regions and relevant departments should establish and improve evaluation measures for contract performance, and implement joint incentives for trustworthiness and joint punishment for untrustworthiness. For the trustworthy enterprises that effectively perform the contracts, they will be inclined to the relevant preferential policies. And for the enterprises that fail to fulfill the contract, they will be notified and interviewed. And enterprises with serious plots will be included in the blacklist of untrustworthy enterprises.

4. Contact Information.
Shi Ying         Tel: +86-10-64469600  Ext. 8011 、18611729229
Lu Xiaoyan    Tel: +86-10-64469600  Ext. 8012、13520347154
Liu Qiaochu  Tel: +86-10-64469600  Ext. 8023、18600793799
Tian Jianlin   Tel: +86-10-64469600  Ext. 8021、13810106827

China National Coal Association
China Coal Transportation and Distribution Association
November 30th, 2018