As a depressed coal market costs mine workers their jobs across the globe – with cuts in staff announced in the UK, the US, and Australia (among others) in the past week – Yancoal Australia has warned that coal prices will remain weak “for a considerable period of time”.
“The current outlook for the global coal market remains depressed and without clear signs of improvement," the company's co-vice chairman, Cunliang Lai, told shareholders at today's annual general meeting.
"We anticipate that weak coal prices will persist for a considerable period of time," Lai continued.
Lai noted that the past year had been dominated by challenging market conditions, with international coal prices continuing to deteriorate, driven by excess supply, while the Australian dollar weakened against the US dollar.
In March this year, Yancoal’s shareholder Yanzhou Coal Mining abandoned a privatization bid for the Australian coal miner, after initially offering to acquire the remaining 22% of Yancoal’s issued shares from its minority shareholders in exchange for 0.91 Yanzhou CHESS depositary interests for every share held.
Instead, Yancoal signed a AU$ 300-million long-term loan facility with Yanzhou.
Lai said that while the company was not satisfied with the financial outcomes of the past year, Yancoal remained encouraged with the underlying value of its assets, adding that the company was well positioned to deliver on its long-term objectives of becoming a sustainable integrated provider of coal products.
“While the entire mining industry is experiencing challenging circumstances, persistent companies with long-term and global vision will still find good opportunities, and Yancoal is one of these companies,” Lai said.
Lai said that to adapt to the market conditions, Yancoal would focus on improving its asset portfolio and capital structure, while also optimising its resource and value opportunities, including marketing synergies, product blending and project deliveries.
The miner would also continue to pursue further cost reductions.
Edited from various sources by Sam Dodson
Read the article online at: https://www.worldcoal.com/coal/30052014/weak_coal_prices_could_continue_917/