Yancoal reaches target despite weather and pandemic challenges

YANCOAL has delivered on its 2020 production target of attributable saleable coal production despite impediments from wet weather and COVID-19.
Yancoal reaches target despite weather and pandemic challenges Yancoal reaches target despite weather and pandemic challenges Yancoal reaches target despite weather and pandemic challenges Yancoal reaches target despite weather and pandemic challenges Yancoal reaches target despite weather and pandemic challenges

Yancoal CEO David Moult.

Yancoal CEO David Moult said the 38.3Mt produced in 2020 was an 8% increase over the prior year and was achieved while keeping operating costs low.

"Mine sites met the challenges of bushfires early in the year, the COVID-19 pandemic through the year and wet weather events late in the year," he said.

"The pandemic and potential for wet weather are circumstances that we expect to carry over into 2021."

Yancoal's operating cash costs target of about A$60 per tonne excluding royalties and a capital expenditure target of less than $300 million were retained through 4Q 2020.

Attributable sales of 37.9Mt fell just short of production.

Exports were impacted following damage to a ship loader due to adverse weather at one of the two coal terminals in Newcastle.

"Yancoal is maintaining its contract obligations following this incident through working closely with logistics providers and utilising its excess rail and port allocations," Moult said.

"Yancoal has sufficient 2021 port allocation for our export volumes this year."

Moult said supply and demand dynamics resulting from COVID-19 continued to influence both thermal and metallurgical coal prices.

"The recent improvement in coal price indices is encouraging, with an increase in demand, associated with the northern hemisphere winter, one of the factors leading to higher prices.

"As always, our focus is on the controllable elements of our business; particularly optimising production and operating costs wherever possible.

"While coal price uncertainty remains, the outlook is improving with coal indices recently recovering to the levels of 12-18 months ago."