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Strategy

Yancoal’s robust business strategy to improve our asset portfolio and strengthen our capital structure has driven the successful restructuring of our operations and the continued development of our major projects.

At a time of increasingly challenging global coal market conditions, Yancoal has secured additional funding to support our continued investment and expansion within the Australian resources sector.

We have responded to the constraints of our current operating cashflow and depressed global coal prices with strong and decisive action to raise new financing in the interests of our shareholders and the future of the underground assets.

On 17 February 2016, Yancoal announced a new debt-funding arrangement to secure up to US$950 million via the issuing of nine-year secured debt bonds by a newly established Yancoal subsidiary, Watagan Mining Company Pty Ltd (Watagan).

By way of services agreements with Watagan, Yancoal continues to manage the Ashton, Austar and Donaldson mines to the highest safety, environmental and operational standards. Effective from 31 March, Yancoal’s control of the New South Wales mining assets of Ashton, Austar and Donaldson transferred to Watagan.

As Yancoal continues to strengthen its position within the Australian market as a leading supplier of quality thermal and coking coal, we remain committed to the following long-term business priorities:

Optimisation of resources and value creation mechanisms

1 Markets

Yancoal continues to pursue new opportunities within countries such as China, India and Vietnam, while strengthening its ties with clients based in Japan, Korea and Taiwan. Supported by the brand strength and backing of major shareholder Yanzhou, we aim to maximise the benefits of product and marketing synergies.

2 Products

Making the most of new blending opportunities across our established network of New South Wales operations, Yancoal continues to pursue new markets and client sales via a strategically targeted approach to elevating our profile and product offerings within the broader international market.

3 Projects

Following the strengthening of our capital structure in late 2014 via the issuing of SCNs, Yancoal will continue to develop the high priority Moolarben Stage Two project, and progress the proposed Stratford and Ashton South East Open Cut expansion projects, pending market needs.

4 Talented Personnel

Yancoal remains committed to developing the skills of its people, working together to build a robust culture of respect, transparency and efficiency, while continuing to employ and retain the right people with the right skills to grow our business into the future.

5 Cost Reduction

By reducing costs through the improvement of operational efficiencies and the sharing of key services and processes, Yancoal is continuing to grow its business while strategically addressing the overhang of take or pay arrangements and the economic downturn of the international coal market.

Asset portfolio and capital structure

Via the issuing of SCNs in December 2014, Yancoal has strengthened its capital structure and  remains strategically focused on developing new organic and acquisitive growth opportunities to improve its asset portfolio in the future.

Business transparency, compliance and efficiency

Yancoal operates its site and corporate functions to the highest standards of corporate governance, reporting via transparent, compliant and efficient processes to meet the needs of all key stakeholders.