Yancoal's cash operating costs - excluding government royalties - per production tonne were $67/tonne compared to $59/t in FY20.
Higher diesel prices, demurrage costs and reduced output due to issues at Moolarben, wet weather, and COVID-19 were factors in the cost increase.
Yancoal CEO David Moult said achieving $67/t operating costs was a good outcome in the context of a challenging year.
"The low-cost production and record average realised coal price of $141/tonne delivered an implied operating cash margin of $63/tonne, after government royalties," he said.
"Combined with almost 37 million tonnes of attributable coal production, these factors delivered record earnings and operating cash flow."
Operating earnings before interest, tax, depreciation, and amortisation of $2.53 billion, up from $748 million in FY20 due mainly to the increased revenue of $5.4 billion.
However, ongoing rain flooding on the east coast remains a challenge.
"The other recurring challenge during the year was the regular rain events generated by the prevailing La Niña weather pattern," Moult said.
"The effects included halting or restricting mining activities due to excess water in open cut operations - particularly when on-site water storage limits were reached - protecting and repairing unsealed roads, and rail and port interruptions.
"During 2022 Yancoal will continue to focus on the controllable elements of our business and mitigate the impacts of uncontrollable elements, particularly optimising production and keeping our operating cash costs low, in order to maximise operating margins."
Wet weather and the regional escalation of COVID-19 during Q4 2021 resulted in low in-pit and run-of-mine stockpiles at Yancoal's NSW mines, requiring a period of pit re-establishment.
Yancoal flagged that in 2022, ongoing wet weather and COVID-19 impacts hampered this recovery and could continue to impact the company's performance throughout the year.
It also made a $100 million impairment of its Donaldson exploration asset in NSW after a strategic review to identify assets it did not expect to become operating mines.
Located in the Hunter Valley, Donaldson Coal comprises three separately managed sites owned by Donaldson Coal, a wholly owned Yancoal company.
Donaldson Open Cut Mine and Abel Underground Mine are located approximately 23km northwest of Newcastle in the Maitland and Cessnock Council areas.
Tasman and the Tasman Extension Project are located approximately 20km west of Newcastle in the vicinity of Mt Sugarloaf.
The Donaldson coal operation has been moved to "care and maintenance". Mining ceased at the Abel underground mine in 2016.
Rehabilitation of the former Tasman mine was successfully completed in 2014.