CHINA QINFA (00866) announced that SDE (a non-wholly owned subsidiary of the company), as the seller, has entered into a coal supply agreement with Zhejiang Energy Asia Pacific as the buyer. The agreement pertains to the purchase of coal by Zhejiang Energy Asia Pacific from SDE.

Under the agreement, SDE will sell and Zhejiang Energy Asia Pacific will purchase 150,000 metric tons of Indonesian fuel coal. The contract allows both parties to mutually adjust the base quantity by up to 10%. Shipment deliveries are scheduled to commence in November 2025 and conclude once the agreed coal volume is fully delivered and paid for. The base quantity will be shipped in two batches, with each shipment carrying 75,000 metric tons (subject to a 10% adjustment range).

The base price of the fuel coal will be determined based on the formula: ((ICI2 + ICI3) / 2 / 5050 × 5000 + $5) × exchange rate. This reflects the average of the second and third tiers of the Indonesian Coal Index, divided by 5,050 kcal and multiplied by 5,000 kcal, plus $5 per ton. The price may be adjusted based on coal quality and net calorific value.

As previously disclosed on June 25, 2024, the initial expectation was for Zhejiang Energy to sign a 20-year coal supply agreement with SDE. However, both parties required additional time to assess annual production capacity before committing to a long-term arrangement. Consequently, they opted for a shorter-term agreement at this stage.

By securing this agreement, the group will benefit from a stable revenue stream due to the consistent demand from Zhejiang Energy's state-owned power generation parent company.

The board of directors (including independent non-executive directors) considers the agreement and the proposed transactions to be part of the group’s ordinary business operations. They believe the terms are fair, reasonable, and in the best interests of the company and its shareholders.