The company is seeking to reduce costs among its underground coal operations, with Austar struggling to achieve full productivity levels per man hours worked since an incident in 2014 when two miners lost their lives.

“All matters have been resolved, with Abel, Austar and Ashton underground mines staff now having signed new contracts with Yancoal Mining Services (YMS),” a Yancoal spokesman told ICN in a statement.

“YMS has been established as a fully-owned subsidiary of Yancoal to assist in managing the Eastern Region underground mines of Ashton, Austar and Donaldson as a single operation.

“The regional model has been implemented to allow the business to more effectively and efficiently manage costs across the underground mines, as well as share the skills and experience of its people across operations.”

Austar production in the December quarter was up a significant 175% on the previous quarter, having recommenced mining in two development areas during the reporting period.

Total annual production of 0.72Mt was down 52% on the year prior, attributable to the cessation of longwall operations in mid-2014 and subsequent realignment of the 2015 business to access and develop new mining areas.

“While market headwinds continued to impact Yancoal sales volumes for 2015, improved production efficiencies resulting from the transfer of the Stratford/Duralie mine to an owner-operator model and the recent restructures of the Abel and Austar mines facilitated significant cost savings and operational improvements to achieve forecast production targets for the year,” the company said.

“For 2016, Yancoal remains focused on developing its Moolarben Stage Two asset, capitalising on new efficiencies, blending opportunities and shared services, while increasing product yields and maintaining consistent production throughput and delivery.”