Yancoal has delivered a steady March quarter, maintaining production guidance for 2026 while navigating rising diesel costs and shifting coal market dynamics.
The quarterly update comes on the back of the news last week that Yancoal will acquire a majority stake in the Kestrel coal mine in Queensland’s Bowen Basin, a key asset in Australia’s coal sector, recognised as the country’s largest producing underground coal mine.
“Last week, we announced the acquisition of an 80 per cent stake in Kestrel Coal Mine for $US1.85 billion, plus a potential contingent cash consideration. Adding a long-life asset that produce hard-coking coal at strong margins is a compelling step forward,” Yancoal chief executive officer Sharif Burra said in a statement.
“We are working with the vendors to reach completion by late Q3 2026. As important as the acquisition will be, our focus on our existing portfolio, which underpins our financial performance, shareholder distributions and capacity to pursue growth, is undiminished.”
The company reported 15.0 million tonnes (Mt) of run-of-mine (ROM) coal production on a 100 per cent basis for the March quarter, alongside 11.9Mt of saleable coal production. Attributable saleable coal production reached 9.0Mt, with attributable sales of 8.2Mt.
Yancoal achieved an average realised coal price of $146 per tonne during the quarter. This included a 3 per cent decline in realised thermal coal prices and a 5 per cent increase in metallurgical coal prices compared to the December quarter.
International coal price indices rose between 5 and 14 per cent over the period, although the company noted its product mix and existing contract structures limited the immediate impact on realised pricing. Yancoal expects the benefits of stronger pricing to begin flowing through from the June quarter.
Operationally, the company’s total recordable injury frequency rate (TRIFR) improved to 5.77, sitting below the industry weighted benchmark.
Yancoal said its operations are tracking in line with expectations, noting that first-quarter production was forecast to be lower, with output set to increase across the remainder of 2026. ROM coal production was 1 per cent lower year-on-year, while saleable coal production declined 5 per cent, placing the company in a comparable position to 2025, when it delivered record attributable saleable coal production.
The miner closed the quarter with a cash balance of $2.01 billion, supporting its growth and operational plans.
Yancoal has retained its full-year guidance of 36.5–40.5Mt of attributable saleable coal production, alongside cash operating costs of $90–98 per tonne and capital expenditure of $750–900 million.
However, rising diesel prices are expected to place upward pressure on costs. Diesel accounted for approximately $7 per tonne of direct mining costs in 2025, consistent with the 2026 budget, but the company has recently begun incurring higher prices. Yancoal now anticipates full-year costs could trend toward the upper end of its guidance range.
The company has secured diesel supply until late May and is working closely with suppliers, while also implementing contingency plans amid potential supply uncertainty.