Yancoal has eye on supply chains during COVID-19 crisis

YANCOAL is keeping a weather eye on the state of international coal markets and critical supply chains to try and weather the worst of the COVID-19 storm.
Yancoal has eye on supply chains during COVID-19 crisis Yancoal has eye on supply chains during COVID-19 crisis Yancoal has eye on supply chains during COVID-19 crisis Yancoal has eye on supply chains during COVID-19 crisis Yancoal has eye on supply chains during COVID-19 crisis

Yancoal CEO David Moult.

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Newly-appointed Yancoal CEO David Moult said the company was also evaluating contingency budgetary measures.

"The global response to the pandemic and the resulting economic turmoil is ongoing and the outcome unknowable," he said.

"Yancoal's immediate focus is the health and safety of its people and operating the assets to the best of its ability."

According to Moult, assessment of the international coal market conditions and the best operational response is an ongoing effort.

"The company retains a sound fiscal position but considers conservation of capital prudent given the uncertain global economic conditions," he said.

"Despite the challenges presented by COVID-19, Yancoal is still pursuing strategic growth opportunities and during the quarter purchased an additional 10% equity interest in the Moolarben Coal Joint Venture from Sojitz Corporation for $300 million.

"This acquisition increases Yancoal's participating interest in this low-cost, tier-1 asset from 85% to 95% and has contributed to a positive adjustment to guidance for 2020 attributable saleable coal production from 36 million tonnes to around 38Mt."

March run-of-mine coal production was down 8% from 1Q 2019 to 16Mt.

During the March quarter, Yancoal's coal product split remained stable at 82% thermal and 18% metallurgical, however, its realised average price for the quarter decreased 18% compared to the same period last year.

"Over the remainder of the year, we anticipate both thermal and metallurgical coal prices will be strongly influenced by supply and demand dynamics resulting from impacts of COVID-19 on international markets and national economies, as well as continued volatility in exchange rates," Moult said.

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