Yanzhou Coal aims for first profit in four years at its Australia unit
Cost-cutting and higher coal prices will change Yancoal Australia’s fortunes this year, says Yanzhou boss
Yanzhou Coal Mining, the listed unit of China’s fourth largest miner of the fossil fuel, is confident it can turn around its loss-making Australian business this year on the back of higher coal prices and cost cutting.
Yancoal Australia, which is 78 per cent owned by Shandong-based Yanzhou, is on course for a “remarkable turnaround” by the end of this year, Yanzhou general manager Wu Xiangqian told reporters on Monday.
“We believe in the not too distant future it will reach break-even,” he said of the unit that posted net losses of 1 billion yuan last year, 1.4 billion yuan in 2015 and 1.8 billion yuan in 2014 amid depressed coal prices.
Yancoal, which mines coal in New South Wales, Queensland and Western Australia, contributed 23.5 per cent of Yanzhou’s raw coal output last year.
The price of power station coal delivered at Australia’s Newcastle port suffered steep losses after coal prices fell precipitously from US$142 a tonne in late 2010 to a trough of US$55 a year ago. It almost doubled to US$107 last November, helped by reduced supply and higher demand in Asia. It has since come back down to US$86.
