Yancoal results show profit of more than $400 million

A CHINESE government-owned coal mining firm operating in Central Queensland has broken production records and posted a profit of more than $400 million in results released on Thursday

Yancoal owns the Yarrabee Mine, west of Gladstone and Rockhampton, plus has a joint venture with Peabody Mining for the Middlemount mine.

It also owns Cameby Downs in Surat Basin near Miles in southern Queensland.

In a release to the Australian Stock Exchange, Yancoal reported its net profit climbed $100 million in 12 months, rising from $301.5 million for 2011 to $406.1 million for the 12 months to December 31 last year.

Across its portfolio of nine projects, including a number in New South Wales, Yancoal produced 14.7 million tonnes of coal and sold 14.8 million tonnes, eclipsing former records.

But despite the apparently positive results, its ASX release suggested Yancoal would focus on cost-cutting as it battled against the rising cost of mining and falling coal prices plaguing the resources sector.

According to its statement, the issues "forced Yancoal to review each of its mining operations with the aim of reducing costs as much as possible".

"This work will continue into 2013; however significant progress has already been made by reducing the use of contractors and consultants where possible."

The company flagged it aimed to secure more customers so sales could keep up with the growing amount of metal-making or metallurgical coal being mined.

Yancoal also suggested it was "cautiously optimistic" about coal prices improving, after hitting what it saw as the market floor in late 2012.



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