Yancoal has reported strong financial results for the quarter ending March 2017.
Highlights
- Quarterly sales volumes (equity share) of 5.01 million t, up 55% on the year prior.
- Strong consistent production from Moorlaben complex drove increased tonnage and sales for the reporting period.
- Successful planning and completion of drainage works prior to the arrival of Queensland’s ‘Cyclone Debbie’ event, offset heavy weather impacts at Yarrabee.
- Revised Duralie open cut mine plan delivered improved consistency of extraction rates throughout the reporting period.
Market
Coal market prices depreciated from the highs achieved during the previous reporting periods, as supply returned to satisfy slower demand. During the reporting period, Indonesian supply was negatively impacted by weather disruptions, resulting in demand for high ash coal to appreciate in southern China, which caused some inconsistencies in thermal coal market relatives. Australian coking and thermal coal supply was detrimentally affected by the impact of Cyclone Debbie at the end of the reporting period, with the storm weather resulting in infrastructure and operational shutdowns. As a result, prices have appreciated going into the April- June reporting period.
Operations
In New South Wales ,Yancoal continue to operate the Moorlaben and Stratford Duralie open cut mines and managed the underground mines of Austar, Ashton and Donaldson on behalf of Watagan Mining Compaby Pty Ltd.
In Queensland, Yancoal operated the Yarrabee open cut mine and maintained its near 50% equity interest in Middlemount Coal Pty Ltd (Middlemount) throughout the reporting period.
Production
Operations produced a total 4.18 million t saleable coal (equity share) for the reporting period, up to 32 % on the previous year, with sales volumes (equity share) of 5.01 million t, up to 55% on the previous year.
The Moorlaben complex drove the business’ strong production result for the reporting period, with both Stage One and Stage Two open cut pits now in full operation.
Moorlaben production was up to 65% on the previous year, due to the ramp up in extraction rates across all three open cut pits, supported by development coal from new Stage Two underground mine. Work continues on time and on budget to prepare the Stage Two underground mine for the scheduled longwall installation in October.
The ongoing expansion of the Moorlaben complex continues to be supported by increased feed rates at the Coal Handling and Preparation Plant, which achieved approval in the year prior to increase throughput from 13.0 million t to 13.5 million t for 2017.
While production at Stratford Duralie was down 46 % year-on-year, output for the reporting period was up on expectations following the redesign of the Duralie open cut mine plan at the end of 2016 in response to challenging geological conditions. The redesign subsequently facilitated improved product coal extraction rates in the later part of the reporting period.