But sustained global market oversupply and depressed thermal and metallurgical coal prices provided little opportunity for earnings improvement during the half-year ended 30 June 2015, with Yancoal announcing a loss after income tax of $145.4 million from revenue of $634.4 million. Operating EBIT was a loss of $126.9 million.

CEO Reinhold Schmidt said: “While we have overcome significant geological conditions at our underground operations to achieve a strong production result for the reporting period, our operations have not been immune to the significant impacts of the negative operating environment.

“Flat coal prices and global market oversupply, aided by the ongoing impact of take or pay arrangements, have forced our New South Wales operations to reduce their employee numbers in recent months.

“Redundancies have a major impact upon the lives of our employees, their families and the local communities in which we operate. While we have taken steps throughout the past six months to redeploy our people wherever possible, unfortunately we have been unable to retain current employee numbers.”

In the second half of the year, Yancoal remains focused on reducing costs and maintaining consistent strong production in line with operational targets, while developing our brownfield growth strategy, Schmidt said.

“The recent approval of the tier-one low cost Moolarben Stage Two project is a positive opportunity for Yancoal to build a premier asset within NSW, with the potential to generate further employment and investment opportunities within the Mid-Western region,” he said.

“The approval of the proposed Stratford extension also provides increased optionality for our business, when considering our future potential expansion plans and ensuring we are ready to respond when market conditions improve.”

Yancoal said global thermal and metallurgical markets are expected to remain flat, with continuing global over supply and China’s restrictive import standards for specific provinces unlikely to provide new opportunities for substantial price improvements in the near term.

“In response to the current downturn, Yancoal remains focused on controlling costs and restructuring its operations to optimise its product mix, maximise yields and pursue new marketing synergies where possible, sharing the services and infrastructure of its New South Wales operations,” the company said.

Yancoal’s production outlook remains 15.0Mt – 15.5Mt saleable production for 2015.