- Write by:
-
Tuesday, October 20, 2020 - 12:08:59 PM
-
573 Visit
-
Print
Mining News Pro - Yancoal is confident that the company is well placed to manage Australia’s uncertain market relationship with China and the current lows in coal prices.
The company is aiming to reduce operating costs where possible by optimising production and has added 700,000 tonnes to its stockpiles, which are historically depleted during the fourth quarter ahead of Asia’s winter.
Chief executive officer David James Moult confirmed that the company will be deferring all non-essential capital expenditure until 2021 but does not expect this to have a detrimental impact on production.
“During the remainder of 2020, we expect to see a recovery of (the) global economic conditions but this will be offset by coal supply cuts not matching demand reduction and elevated gas supply,” Moult said.
“In China, the arbitrage between domestic and import prices remain above $US25 ($35) per tonne, supporting the demand for imported coal and it is unclear if China will relax its custom clearance times and allow for further imports.
“Uncertainty will remain regarding the direction of coal prices over the rest of the year.”
Yancoal’s coal index relevant to its products is down by 25 to 30 per cent compared with 12 months ago and its realised price has also fallen from $107 per tonne in the third quarter of 2019 to $70 per tonne for the third quarter of 2020.
Despite these challenges, Yancoal’s saleable coal production for the first three quarters of 2020 is 11 per cent ahead of the 2019 volume, thanks to increased output from the Moolarben mine in New South Wales.
Moolarben’s processing plant performed above Yancoal’s expectations, thanks to higher than expected volumes by-passed at the plant, with the company producing 5.1 million tonnes of saleable thermal coal during the third period, up 6 per cent on quarter two.
Fellow New South Wales operation Mount Thorley has caught up to 2019’s year-to-date saleable coal production levels of 3.5 million tonnes of met thermal coal, after prior disruptions such as bushfires and ongoing rains.
At the Hunter Valley operations, New South Wales production was scaled back to 4.1 million tonnes in the third quarter compared to 4.4 million tonnes in the second, to ride out soft market conditions.
The Middlemount met thermal coal mine in Queensland achieved an 11 per cent increase quarter on quarter to 700,000 tonnes of saleable coal production despite low stocks impacting output at the start of the period.
The Straford Duralie (New South Wales) site experienced low run of mine volumes but managed to match its year-to-date saleable production of 100,000 tonnes of met/thermal coal, while Yarrabee’s (Queensland) saleable coal production dropped by 11 per cent to 800,000 tonnes.
Despite the uncertainty ahead, Yancoal is still future focussed, having received the required approvals to increase Moolarben’s run of mine production from 21 million tonnes to 24 million tonnes annually.
Studies are underway to address further licensing requirements and to assess the optimal production profile.
Short Link:
https://www.miningnews.ir/En/News/606352
Anglo American Plc said it is has received an unsolicited non-binding combination proposal from BHP Group.
A key measure of Chinese copper demand just sank to zero, another indication that global prices are not balanced with ...
Iron ore futures prices ticked lower on Monday, weighed down by diminishing hopes of more stimulus in top consumer ...
China’s state planner on Friday finalized a rule to set up a domestic coal production reserve system by 2027, aimed at ...
Chile’s SQM called another investors meeting at the request of its second-largest shareholder, Tianqi Lithium Corp., ...
The world’s coal-fired power capacity grew 2% last year, its highest annual increase since 2016, driven by new builds in ...
Peabody Energy Corp. shares sunk to the lowest in seven months after the biggest US coal miner warned that first-quarter ...
Polish government is abandoning plans to separate coal-fired power plants into a special company and is considering ...
BMO Bank quietly dropped its policy restricting lending to the coal industry in late 2023, helping it avoid being ...
No comments have been posted yet ...