Yancoal keeps focus on growth despite production dip

Image: Yancoal.

Yancoal has capped off the March quarter by producing 16 million tonnes of run-of-mine coal, an 8 per cent drop from the same period last calendar year.

This result comprised of 5.8 million tonnes run-of-mine coal from the Moolarben mine in New South Wales, up 5 per cent on the previous corresponding period.

Wet weather restricted drilling and blasting activities at the Yarrabee and Middlemount mines in the Bowen Basin, with production decreasing by 17 per cent and 36 per cent, to 500,000 tonnes and 700,000 tonnes respectively.

The wet conditions also restricted mining activity at the Mount Thorley mine in New South Wales, causing a drop of 22 per cent on the previous corresponding period, to 3.6 million tonnes.

Yancoal’s Hunter Valley operations were also affected by wet weather delays and dropped 9 per cent to 4 million tonnes run of mine on the previous corresponding period.

The company is continuing to observe the market, including reduced global exports and increasingly uncertain demand and prices for the rest of 2020, due to the coronavirus pandemic.

“Despite the challenges presented by COVID-19, Yancoal is still pursuing strategic growth opportunities and during the quarter purchased an additional 10 per cent equity interest in the Moolarben coal joint venture from Sojitz Corporation for $300 million,” chief executive officer David Moult said.

“During the quarter, our coal product split remained stable, (82 per cent thermal; 18 per cent metallurgical), however our realised average price for the quarter decreased by 18 per cent compared to the same quarter last year.

“Over the remainder of the year, we anticipate both thermal and metallurgical coal prices will be strongly influenced by supply and demand dynamics resulting from impacts of COVID-19 on international markets and national economies, as well as continued volatility in exchange rates.

Yancoal is continuing to operate all of its mines with no material production impact from the virus and is following all government guidelines to keep its workforce safe and healthy.

It has confirmed that there are no known cases of coronavirus among its employees and will make further announcements should it need to make changes to its operational guidance.

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