The following statement is from Yancoal's 2017 Annual Report:
In 2017, Yancoal surpassed industry expectations to successfully acquire Coal & Allied from Rio Tinto in a competitive acquisition, effectively doubling the scale of our operations and employee numbers.
The expansion of our open cut portfolio at
a time of sustained market price improvements has enabled Yancoal to achieve significant production gains well beyond our pre- acquisition performance.
Only three years ago Yancoal was operating in a deflated and disappointing resources market, restructuring our operations and managing costs to ensure we were ready for an eventual upturn.
As prices improved throughout the past year, we have held true to our promises to continue to invest into the Australian resources sector, employ from the areas in which we operate, and remain absolutely committed to operating safely and transparently.
Our transformative acquisition has required a whole-of-business commitment and its successful completion is of credit to our people and their ability to anticipate, respond and recalibrate to market forces and operational demands.
Together, we have secured Yancoal’s future as Australia’s largest pure-play coal producer, with majority interests in two of the country’s leading tier-one large-scale, long-life and low-cost open cut coal mines, adding to the strength of our established tier-one Moolarben complex.
As we have increased in scale, we have remained focused on ensuring the safety of our people. Remaining ever vigilant in ensuring we are providing a safe workplace for the more than 5,000 people directly responsible for helping Yancoal achieve its ongoing market success.
To support this commitment, we continue to implement safety training and incident response practices across each of our operations, including the 2017 introduction of a Critical Controls initiative to identify and mitigate against significant on-site risks.
Only through continued training, education and awareness can we help to ensure each of our people returns home safely. There are no shortcuts to safety and it is the responsibility of every person within our business to be watching out for themselves and those working alongside them.
We must never compromise on safety.
With our management and operational teams successfully integrating the Mount Thorley Warkworth and Hunter Valley Operations assets into our business from day one, we have immediately benefitted from operational synergies and the creation of new marketing opportunities.
The Company’s balance sheet strengthened via increased cashflows from a full fourth quarter’s contribution of attributable new coal product sales.
Sales volumes for the fourth quarter reporting period were up 83 percent on the year prior; including 3.45 million tonnes, a 56 percent contribution to the year-on-year increase, from Hunter Valley Operations and Mount Thorley Warkworth.
During the year, we achieved a series of key milestones essential to the next stage of Yancoal’s continued growth, both organic and via strategic acquisition.
Of specific note, we completed the commissioning of the Moolarben Stage Two underground mine ahead of time and below budget, commencing longwall production in October.
The completion of the Stage Two expansion, consisting of two open cut pits and the new underground, has now established the Moolarben complex as a leading operation in New South Wales, benefitting from fleet efficiencies introduced in the year prior and achieving superior extraction rates both above and below ground.
Simultaneously, we have also maintained the necessary operational flexibility and discipline required to adapt the mine plans of our Stratford Duralie and Yarrabee open cuts throughout the year to successfully improve extraction rates, reduce costs and more efficiently meet changing global market demands.
Employing the majority of our people from the areas in which we operate, and relying on local contractors and service providers to support our operations, we remain ever mindful of our responsibilities across regional Australia.
It is up to each of our operations to keep our local communities engaged and informed. Operating to the highest environmental and safety standards, while communicating openly and transparently. We cannot continue to grow unless our local stakeholders are considered in our decision-making.
We must also continue to play an important
role in financially contributing to local and regional employment, training, health and education initiatives we believe capable of making a positive difference.
Within the past year we have contributed more than $1.3m to community-focused initiatives via our Community Support Program and I look forward to our new operations playing a major role in supporting and establishing viable and sustainable regional programs.
THE YEAR AHEAD
Renewed global demand for high quality coal, buoyed by improved coal prices will continue to strengthen Yancoal’s performance as we progress the development of our open cut operations and continue to pursue new marketing and blending opportunities.
Moving forward, we are well advanced in our preparations for the eventual implementation of our joint venture with Glencore at Hunter Valley Operations, subject to final approvals.
The joint venture will ultimately provide Hunter Valley Operations with the opportunity to benefit from substantial synergies from Glencore’s adjoining operations and both parties look forward to working together to drive new market growth.
Via the transaction we have also attained a 36.5% share of ownership of Port Waratah Coal Services Limited.
AUSTRALIA’S LARGEST PURE-PLAY COAL PRODUCER
We are now an established leader within the Australian resources sector and have clearly demonstrated we have the capabilities, experience and initiative to exceed expectations within the global marketplace.
This is a new day, a new opportunity and I would like to thank the Yancoal team and our shareholders for their continuing contribution to our growth and success.
Looking ahead, there is still much to achieve.
Chief Executive Officer