Yancoal has been hit with more rainfall at its Hunter Valley operations in New South Wales which has impacted mining, rail and port activity during the June quarter.
The company recorded similar production results to its first quarter with saleable coal production up 2 per cent at 8.8 million tonnes.
“Rainfall continued to disrupt mining, rail and port activity during the period, particularly at the Hunter Valley operations,” Yancoal chief executive officer David Moult said.
“Our three largest, open-cut mines have been working to overcome the first quarter flood impacts and ensure production recovery plans are effectively implemented.
“We currently expect the revised mine plans to enable Yancoal to deliver the 2021 target of around 39 million tonnes of attributable saleable coal.”
Yancoal is confident logistics constraints will not impact production guidance.
The 39-million-tonne target will require 21.5 million tonnes to be produced in the second half of 2021, an increase of 23 per cent on the first half.
Moult saw this as achievable as the company hopes for a clear run through the second half.
“As always, our focus is on the controllable elements of our business, particularly optimising production and reducing operating costs wherever possible,” Moult said.
“This is particularly the case after the production lost during the first quarter due to bad weather.
“Yancoal’s low cost of production and ability to blend its output to meet customer requirements mean we are well placed to benefit from the improving market conditions.”
The company will look to turn a negative into a positive, as various disruptions to coal operations globally have an effect on the commodity’s cost.
“One positive aspect of the disruption, coupled with logistics and weather issues internationally, is that export coal indices continued to improve,” Moult said.
“Although obligations to deliver delayed shipments at previously contracted prices reduced the index movement’s immediate benefit on our received price during the quarter, the $13 per tonne realised price improvement over the prior quarter was very encouraging.”