But the tough coal market has forced Yancoal to review each of its mining operations with the aim of reducing costs by as much as possible.

“This work will continue into 2013, however significant progress has already been made by reducing the use of contractors and consultants where possible,” the company said.

Last month, joint venture partners Peabody Energy and Yancoal ousted the contractor NRW from mining duties at Queensland’s Middlemount coal operation.

NRW staff will be invited to apply for roles with Middlemount Coal, with the transition expected to be completed by mid-year.

Yancoal also shocked the market last month when it announced that chief executive Murray Bailey would be leaving the company.

Revenues from continuing operations come in at $1.4 billion for the year.

Moolarben made 5.2Mt saleable coal and sold 5.5Mt for the year as ROM production increased to its fully approved rate of 8Mpta in November and despite a shutdown for two weeks over Christmas.

The other standout was the Donaldson group, especially the Abel Mine where ROM coal and saleable coal production increased 39% and 30% respectively in the second half of the year.

The significant improvement was due to introducing the “Being Abel” program at the Abel Mine. The process uses “LEAN” methodology to reduce waste and improve all aspects of the mining process.

“The improvements achieved at Abel are so significant that Yancoal intends to progressively adopt the process at each of its other mines in the future, the company said.

“Austar will be the next mine to introduce the new regime.”

Coal production will increase in 2013 with expansion plans underway at several of the mines, the company said.

“However, significant production growth will occur when Stage 2 of the Moolarben project and Ashton’s South East Open Cut are commissioned,” it said.

“Yancoal will continue to develop new coal markets where possible so that growing production can be brought to market.

“The marketing team will focus on increasing the amount of coal sold as metallurgical coal and will increase coal sales under longer term contracts rather than spot sales. Management is cautiously optimistic about the coal price outlook for both thermal and metallurgical coals.

“Recent coal pricing action suggests that the cycle lows for coal prices were experienced during the second half of 2012.”