Mon Aug 20, 2012
PERTH Aug 20 (Reuters) - Majority Chinese-owned Yancoal said it would review expansion plans at its seven Australian coal mines as slowing economic growth in top consumer China pressures global prices of the commodity.
Several companies operating in Australia, including mining giants BHP Billiton, Rio Tinto and Xstrata , have recently taken steps such as deferring expansion plans and cutting staff to reduce costs to deal with falling coal prices.
Australian thermal coal prices have slipped about 18 percent so far this year and metallurgical coal prices have dropped more than 25 percent since the beginning of July. Yancoal produces both thermal and metallurgical coal.
"Yancoal is considering all options to reduce costs," the company said in a presentation by Chief Executive Murray Bailey released to the Australian stock exchange on Monday.
"Expansion plans across all mines will be reviewed and ranked to ensure that the appropriate capital expenditure discipline is maintained," the company said.
Australian mining operations, which have higher costs of production than competitors in other top producing nations such as Indonesia and Colombia, have been particularly hit hard by the combination of low coal prices, weak demand and a strong Australian dollar.
"Further job losses are a certainty. The bottom line in 2012 is that many Queensland coal producers are now generating cash losses," Michael Roche, the chief executive officer of the Queensland Resources Council said earlier on Monday at an industry conference in Brisbane.
Yancoal, which is majority-owned by Chinese parent company, Yanzhou Coal, was listed on the Australian stock exchange in June after a merger with Australia's Gloucester Coal.
(Reporting by Rebekah Kebede; Editing by Himani Sarkar)
PERTH Aug 20 (Reuters) - Majority Chinese-owned Yancoal said it would review expansion plans at its seven Australian coal mines as slowing economic growth in top consumer China pressures global prices of the commodity.
Several companies operating in Australia, including mining giants BHP Billiton, Rio Tinto and Xstrata , have recently taken steps such as deferring expansion plans and cutting staff to reduce costs to deal with falling coal prices.
Australian thermal coal prices have slipped about 18 percent so far this year and metallurgical coal prices have dropped more than 25 percent since the beginning of July. Yancoal produces both thermal and metallurgical coal.
"Yancoal is considering all options to reduce costs," the company said in a presentation by Chief Executive Murray Bailey released to the Australian stock exchange on Monday.
"Expansion plans across all mines will be reviewed and ranked to ensure that the appropriate capital expenditure discipline is maintained," the company said.
Australian mining operations, which have higher costs of production than competitors in other top producing nations such as Indonesia and Colombia, have been particularly hit hard by the combination of low coal prices, weak demand and a strong Australian dollar.
"Further job losses are a certainty. The bottom line in 2012 is that many Queensland coal producers are now generating cash losses," Michael Roche, the chief executive officer of the Queensland Resources Council said earlier on Monday at an industry conference in Brisbane.
Yancoal, which is majority-owned by Chinese parent company, Yanzhou Coal, was listed on the Australian stock exchange in June after a merger with Australia's Gloucester Coal.
(Reporting by Rebekah Kebede; Editing by Himani Sarkar)
No comments:
Post a Comment