The company’s ambitious expansion plans for its mines were now being review and would be ''ranked to ensure that the appropriate capital expenditure discipline is maintained'', Yancoal Australia chief executive Murray Bailey told analysts.

"In the second half we expect coal prices to remain both weak and volatile," Bailey said.

"We are looking at all options to reduce costs, especially discretionary costs and consulting costs and contracting costs across the organisation."

Yancoal, which listed on the Australian Securities Exchange on June 28, reported a net profit of $415 million for the six months to June 30. Operating profit excluding one-off items dropped from $253.6 million to $42.3 million for the same six month period.

But Bailey said the company would not cut back on production from its existing mines, which include the Moolarben and Ashton mines in New South Wales.

"I've been a player in this game for over 30 years and one of the last things to be cut back [in a downturn] is production," Bailey said.

"It's very difficult for companies to make decisions as rapidly as the prices have moved."

Yancoal’s 78% shareholder, Chinese giant Yanzhou, is reported as saying the price of thermal coal should pull out of its downward spiral and start picking up from September as economic conditions improve in China.

The Chinese government is introducing measures that will spur growth to help put a floor under thermal coal prices, which have dropped by 20% this year.

"The economy in China is strengthening, so the expectation is demand will start to pick up toward the end of the third quarter," Yanzhou chairman Weimin Li reportedly told Bloomberg in Sydney in July.

"From late September, you will see support for prices.

"Internationally, the trend is very similar. We're hitting the bottom, and we're waiting for the market to pick up."

In NSW Yancoal operates Moolarben mine near Mudgee in the NSW central west; Ashton, Austar, Abel, Tasman and Donaldson mines in the Hunter Valley; and Duralie and Stratford in the Gloucester region north of Newcastle.

The company will also operate Yarrabee mine near Blackwater in central Queensland, and has a near 50% share in Middlemount mine northwest of Rockhampton.

In July Yancoal resubmitted its stage 2 planning application to increase open cut run of mine production capacity to 13 million tonnes per annum at Moolarben, with the underground mine expected to reach approximately 4Mtpa of run-of-mine production.