Yancoal responded to sustained low coal price impacts and existing operating cashflow constraints in the first half of the year via the implementation of its debt funding arrangement and transfer of control of the Austar, Ashton and Donaldson underground operations to Watagan.

The company continued to restructure its operations throughout 2016, maximised blending across the New South Wales sites, increased efficiencies in the sharing of skills and services across operations, and proactively managed its existing take or pay arrangements.

Yancoal CEO Reinhold Schmidt said throughout 2016 the company had proactively strengthened its balance sheet, reduced operational costs and maximised blending to benefit from significant global coal market price improvements and increasing customer demand.

 “In the year ahead, we will continue to progress the development of our open cut operations, while pursuing new marketing and blending opportunities to maximise yields,” he said.

 “Renewed global demand buoyed by improved coal prices will continue to strengthen Yancoal’s performance, as we pursue our future growth initiatives and strategic acquisitions in the best interests of our shareholders.”

Cost reduction strategies continued to be supported at all operations, with the Moolarben Stage Two Project achieving critical development and construction goals, including the commencement of development coal from the new Moolarben underground in the first half of the year.

“We have demonstrated our capacity and resilience within a challenging market via strong and decisive action to deliver the tier one Moolarben Complex’s Stage Two underground mine on time and budget,” Schmidt said.

 

Sales volume increases, global coal market price improvements and 2016 industry-high quarterly benchmark prices for semi-soft coking and PCI coal during the second half of the year drove a total operating earnings before interest and tax of $52.3 million before tax, up $253.1 million on the year prior.