Yancoal has implemented a new strategy to maximise its coal product value, while playing catch up in the second half of 2021, following rain delays and ongoing COVID-19 disruptions.
Australia’s largest exporter of thermal coal produced just 17.5 million tonnes of attributable saleable coal during the first half but will continue to target a full-year goal of 39 million tonnes in 2021.
This will require a 23 per cent ramp up by the end of the year, but Yancoal chief executive officer David Moult said the pandemic had thrown another spanner in the works.
“All our operations remain COVID-19 free, however with COVID-19 more prevalent in regional areas we have introduced additional protocols in response to the increased number of positive cases in the community,” Moult said.
“The spread of COVID-19 to areas near our mines has increased the instances of workers not being able to attend site as they follow Government protocols.”
Yancoal’s three largest sites – Moolarben, Mount Thorley Warkworth, and the Hunter Valley operations – are all located in New South Wales and are therefore subject to the various COVID-19 restrictions put in place over July and August.
These three operations produced a combined 23.9 million tonnes of run-of-mine coal in the first half of 2021.
This was down 3.8 million tonnes on the first half of 2020, as previously announced rainfall delayed the operations.
To offset the losses and ongoing impacts of COVID-19, Moult said the company had implemented a new strategy.
“We have implemented a ‘wash harder’ strategy to improve the coal quality of our product. The strategy incurs additional costs but aims to capture the arbitrage between high-ash and low-ash thermal coal prices to deliver a net positive outcome,” Moult said.
“As always, our focus is on the controllable elements of our business, particularly optimising production and reducing operating costs wherever possible.”