The newly listed company – which has Chinese giant Yanzhou as its 78% shareholder – made the announcement yesterday, sending its shares plunging by 3.5c to 84.5c. More than 35% has been wiped off the company’s market capitalisation since it backdoor listed on the Australian Securities Exchange through Gloucester Coal in June.
Yanzhou must also lower its stake in Yancoal to 70% by the end of the year, according to the Foreign Investment Review Board approval terms of the merger.
“Yancoal wishes to announce that it has agreed with its CEO, Murray Bailey, that his employment with the company will not be extended beyond its current term, which expires on 6 July 2013,” the company said in statement yesterday.
“Mr Bailey’s responsibilities as CEO have required him to commute from Brisbane to Sydney. Mr Bailey’s departure will enable him to spend more time with his family, which is based in Brisbane.
“The company has commenced a search for Mr Bailey’s replacement.”
Bailey joined the company in 2010 and was instrumental in completing the integration with Gloucester following the merger in June.
Market speculation about Bailey’s departure centres around his difficulties with the Chinese director-dominated board. His strong operational background gained with Wesfarmers and New Hope was expected to be used in the company’s next expansion phase and dealing with issues arising out of the Queensland floods.
Production at Yancoal’s Middlemount mine was impacted by heavy rainfall generated by ex-tropical cyclone Oswald in Queensland last month as one of the surrounding levee banks was breached and water flowed into the open cut mine.
The mine operators and management are responding by installing pumping equipment to remove water from the mine.
Yancoal said production was likely to be impacted until at least the middle of the month, but timing on the start of coal mining remained uncertain.
The company says a feasibility study for an underground mine at Moolarben complex in New South Wales is advancing on schedule, with completion slated for late in the first half of this year.
But the NSW Department of Planning and Infrastructure is yet to finalise its assessment of the project’s stage 2 development, which is made up of the open cut 4, underground 1 and underground 2 mines.
Yancoal’s Ashton mine in New South Wales enjoyed higher production levels in the December quarter but the narrowing of the Upper Liddell seam and a legal challenge to the company’s plans to extend its open cut mine to the southeast may slow down growth in the future.
Total run-of-mine coal production from the longwall and development activities was 975,000 tonnes for the quarter – a 29% increase on the previous corresponding period.
Saleable coal production for the December quarter was 441,000t.
The longwall retreated a total of 1015m in the Upper Liddell seam during the quarter.
Run-of-mine production from Yancoal’s Austar mine in New South Wales fell in the December quarter because the longwall stopped mining for a short period in order to remove the rear face conveyor.
The equipment, used for recovering caved coal, was removed from the longwall in November in preparation for moving it to the stage three area when it completed mining the current panel. This is a usual practice where the equipment is removed prior to the end of a panel, according to Yancoal.
