Message from Chairman
Since 2020, Yancoal has faced significant external challenges - severe floods, the continuation of COVID-19, industry-wide labour shortages and high inflation. But the company has not been overwhelmed by these difficulties. The business developed a comprehensive strategy to: operate efficiently; ensure safety at all times; prepare for possible negative external shocks and events; maximise production and productivity; achieve production targets; and achieve management objectives.
Tangible examples of how Yancoal implemented this strategy during 2022 included:
• Responding to unprecedented rain events, the business promptly adjusted mining plans at sites to increase investment in water management facilities so that production would not suffer drastic impacts;
• Over 90% of Yancoal employees participated in “Safe Way” program training. During 2022, Yancoal safety statistics continued to outperform the coal industry average;
• To improve maintenance performance and to reduce maintenance costs, Yancoal developed and implemented an equipment operation improvement and optimisation project that was based on each site having its own specific strategy; and
• To address the labour shortages being experienced across the Australian resources industry, Yancoal enacted a talent attraction and retention strategy, and introduced a new internal communication and collaboration platform (“OnePlace”).
This business strategy has achieved remarkable results in 2022 and Yancoal has experienced record revenue and profit, as well as maintaining its position as one of Australia’s largest coal exporters and one of the Yankuang Energy Group’s most important foreign investment pillars.
In 2022, Shandong Energy Group celebrated 20 years since its first international investment beyond Shandong Province. Yancoal has played an important role in the “Development Beyond Shandong” strategy and in 2022 was deservedly recognised as an “Outstanding Contribution Company” amongst the broader Shandong Energy Group.
An important element of Yancoal’s success has been the integration Australian and Chinese cultures. Such integration can only be facilitated by a mutual understanding and respect for the common goals we are seeking to achieve for Yancoal, as well as our differences. There has been a concerted effort to increase engagement with Yancoal’s external stakeholders and shareholders to demonstrate our operations and the unique position we hold for both Yankuang Energy and Shandong Energy Group. These activities will continue as Yancoal forges ahead to maximise the value of its Australian coal assets and seeks opportunities internationally.
Yancoal continues its diversification strategy through the potential development of renewable energy projects and expansion into minerals and commodities beyond coal. As part of this strategy, in 2022, Yancoal started assessing two renewable energy projects. A feasibility study has commenced into the Stratford Renewable Energy Hub, which could include pumped hydro power and solar facilities, and a Memorandum of Understanding was executed to study the application of innovative kinetic energy storage technology at the former Austar coal mine. If developed, both these projects have the potential to increase Yancoal’s self-sufficiency for power and to deliver diversification for the business.
Despite a particularly difficult period over the past few years, nevertheless Yancoal has delivered some monumental “first time” achievements in 2022 that need to be recognised, such as the repayment of external interest bearing loan debt, the payment of fully franked dividends, and diversification into renewable energy projects. The foundation is set for Yancoal to generate further returns for shareholders in 2023 and beyond.
Chairman of the Board