Yanzhou stays afloat, reinvests

CHINESE giant Yanzhou Coal recorded a 1.4% increase in net profits for the first half of 2012 as increased production and sales balanced increasing costs, sluggish demand and depressed coal prices.
Yanzhou stays afloat, reinvests Yanzhou stays afloat, reinvests Yanzhou stays afloat, reinvests Yanzhou stays afloat, reinvests Yanzhou stays afloat, reinvests

 

Justin Niessner

The New York, Shanghai and Hong Kong-listed miner counted a net income of $US830 million on the six-month period.

Raw coal production came to 31.6 million tonnes, representing a 23% increase over the same period last year.

The company credited the production increase to the acquisition of the Wenyu coal mine in July and increased output from its Australian mines, Syntech and Premier.

Yanzhou’s Australian unit, Yancoal, listed on the Australian Securities Exchange in June and completed a takeover of Australian miner Gloucester Coal the same month.

Coal sales income increased 96% compared to last year as externally purchased coal and Yancoal output boosted sales volumes for the period.

This progress, however, was tempered by an 11% increase in the cost of coal sales per tonne.

Yanzhou said increases in rights fess of coal mines, environmental security deposits and employee wages resulted in increased costs for production and sales.

As of the end of the half-year, the company posted a cash balance of $2.9 billion after the issuance of $1B of corporate bonds.

The cash is expected to be sufficient for a number of operation and development expenditures planned for the second half of 2012, including internal efficiency controls and expansion of overseas production.

Under an outlook predicting an increase in coal demand, Yanzhoul said it would make efforts to speed up the application and approvals processes for projects in China, Australia and Canada.

Yanzhou holds 19 permits for potash resources covering 1.3 million acres of Saskatchewan.

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