The new financing arrangement demonstrates China’s continuing commitment to Yancoal’s long term business strategy, he said.
“Under the terms of the funding agreement, Yancoal has ceased to control the Austar, Ashton and Donaldson assets, but remain as the exclusive provider of mine management, marketing, infrastructure and other corporate support services under 10-year contracts,” he said.
“This significant investment demonstrates the increasing benefits of China and Australia trade relations and how we can work towards maximising the shared opportunities between our two countries.”
The new financing arrangement secures up to $US950 million in debt-funding via the issuing of nine-year secured debt bonds by a newly established Yancoal subsidiary, Watagan Mining Company Pty Ltd, to a consortium of financiers consisting of Industrial Bank Co. Ltd, BOCI Financial Products Limited and United NSW Energy Limited.
“We were also not immune to the impacts of China’s National Development and Reform Commission’s introduction of new quality coal restrictions for imports, with product sales from our Yarrabee operation directly affected for the majority of the reporting period,” Li said.
“In response to these challenges we continued to restructure and revise our mining plans, while maximizing our blending opportunities and looking to new markets within Asia to meet product sales expectations.
“While we worked to mitigate against the impacts of the market downturn, further restructures unfortunately necessitated the reduction in workforce numbers, with the Abel and Austar operations directly affected.”
Other significant changes included the successful transition of the Stratford Duralie open cut from contractor-operated to owner-operated. The change enabled Yancoal to more efficiently implement cost management strategies across the sites and improve production rates, Li said.
