Yancoal Reports 20% Rise in Saleable Coal Output and A$160/t Price

Record Quarterly Production Boosts 2026 Outlook

Yancoal (ASX:YAL) delivered a standout performance in the June 2026 quarter, hitting a new record for attributable saleable coal production at 10.8 million tonnes; a 20% surge from the prior quarter. This uplift was driven by a shift from waste removal to coal mining and operational efficiencies across key assets, notably Moolarben and Mount Thorley Warkworth, which posted 23% and 34% increases in saleable coal respectively. The company’s first-half total of 19.8Mt is 5% ahead of the same period last year, positioning Yancoal to exceed its 2025 record and comfortably land in the upper half of its 2026 guidance range of 36.5-40.5Mt.

Alongside volume gains, Yancoal’s average realised coal price climbed to A$160 per tonne, supported by an 11% increase in thermal coal prices and a 3% rise in metallurgical coal prices compared to the March quarter. While coal price indices softened late in the quarter, the company expects these gains to flow through to subsequent periods. Diesel price pressures, a key cost input, have eased somewhat but remain elevated, nudging operating costs towards the higher end of the A$90-98 per tonne guidance band.

Kestrel Acquisition Advances, Ashton Closure Announced

Strategically, Yancoal is on track to complete its acquisition of an 80% interest in the Kestrel Coal Mine by the end of September 2026, having secured Foreign Investment Review Board (FIRB) approval and satisfied several conditions precedent. The US$1.85 billion upfront deal, supplemented by contingent payments, will expand Yancoal’s metallurgical coal exposure to approximately 22% on a pro forma basis, enhancing its portfolio with a long-life, high-margin Queensland asset.

Conversely, the company has announced plans to cease operations at its Ashton underground mine by early 2028 due to persistent technical, geotechnical, and economic challenges. Yancoal is prioritising workforce support through redeployment options and career transition assistance as it phases out mining activities over the next two years. The closure will unfold in stages, with development activities winding down in early 2027 and longwall mining concluding by early 2028, followed by rehabilitation efforts yet to be fully scoped.

Safety Performance and Market Dynamics

Yancoal’s safety metrics showed a setback with the Total Recordable Injury Frequency Rate (TRIFR) rising to 6.64 from 5.77 in the previous quarter, though still below the industry weighted average of 9.23. The company has signalled a renewed focus on targeted safety interventions to reverse this trend.

On the market front, robust demand and supply constraints across key regions underpinned coal price strength during the quarter. Asian markets, including China, Japan, South Korea, and Taiwan, saw increased thermal coal imports amid energy security concerns and LNG supply volatility exacerbated by geopolitical tensions. Meanwhile, supply disruptions in Indonesia, South Africa, and Russia contributed to tighter global thermal coal availability. Metallurgical coal demand remained stable with a notable uptick in Chinese imports following domestic mine suspensions.

Development Projects and Regulatory Progress

Yancoal continues to advance several development projects, including a feasibility assessment for the Mount Thorley Warkworth underground mine extension and a significant mine life extension at Hunter Valley Operations (HVO). The latter is under regulatory review, with a public hearing scheduled for July 2026 and an Independent Planning Commission decision expected by the end of September. Moolarben’s OC3 Extension Project has been amended and resubmitted, potentially adding 30 million tonnes to its life of mine ROM production.

Additionally, the Stratford Renewable Energy Project recently secured NSW government planning approval and is progressing federal environmental assessments, though commercial viability and funding models remain under evaluation.