PERTH (miningweekly.com) – ASX-listed Yancoal has narrowed its loss during the financial half-year ended June, as higher demand for quality thermal coals drove price improvements throughout the reporting period, buoyed by the impact of the Queensland cyclone event at the beginning of the year.
The miner reported an after-tax loss of A$13.9-million, compared with the A$180.5-million loss of the previous corresponding period.
Total run-of-mine coal production for the interim period reached 13.8-million tonnes, while saleable coal production was reported at 10.7-million tonnes.
“Led by our proposed transformative acquisition of Coal & Allied (C&A) and the progression of the Moolarben Stage 2 underground on time and on budget, we have continued to drive our long-term strategy for growth throughout the reporting period,” Yancoal CEO Reinhold Schmidt said on Monday.
“As we work towards completing the acquisition, we remain focused on driving production gains and lowering costs across all existing operations.”
Yancoal was named as the preferred bidder for Rio’s Australian C&A unit in June, after increasing its offer to $2.69-billion, adding $240-million in unconditional guaranteed royalty payments to a previous cash offer of $2.45-billion.
The Yancoal offer was increased to rival a bid from Glencore, which had offered Rio $2.67-billion for the C&A assets, which include a number of opencut thermal coal mines in the Hunter Valley.
Glencore subsequently signed an agreement with Yancoal to acquire a 49% interest in the Hunter Valley operations from Yancoal for $1.14-billion in cash plus a 27.9% share of the $240-million non-contingent royalties over five years, as well as 49% of price contingent royalties payable by Yancoal to Rio on production from the assets.
“Moving forward, we remain committed to completing the strategic acquisition of C&A and strengthening our balance sheet to create greater shareholder value,” said Schmidt.
“The acquisition of C&A is expected to establish Yancoal as the largest pure play coal producer within Australia and demonstrates the long-term commitment of our board and major shareholders to investing into the local resources sector.”