Yancoal warns of diesel supply uncertainty post May, lower coal output
Make us a preferred source
Make us a preferred source on Google
The news: Yancoal Australia has warned that it has established contingency plans as the continuity of its diesel supply will become less certain after the end of May, in addition to flagging lower coal output and prices during the first quarter of 2026.
The numbers: In its quarterly earnings released Monday evening, Yancoal reported production of saleable coal fell 5% from the year prior to 9 million tonnes, while attributable sales volumes dropped 2% to 8.2 million tonnes.
The average price realised per tonne fell 7% to $146 per tonne.
The context: While Yancoal said that direct impact of the Middle East conflict on the physical coal market have been slow to emerge, it said that higher diesel prices are affecting its cash operating costs, with prices for diesel exceeding the approximately $7 per tonne of direct mining costs pricing in 2025. Yancoal said further indirect costs increases are likely to follow.
“We have secured diesel supply until around the end of May, and are working closely with our main suppliers,” CEO Sharif Burra wrote in a statement.
“Beyond this horizon, continuity of diesel supply may become less certain, and as a prudent measure we have established contingency plans. Given the outlook for diesel prices, we now anticipate cash operating costs for the year could be close to the upper end of our guidance range based on the current forecasts. Uncertainty in global oil and diesel markets will require on going assessment of our cost profile.”
The earnings come less than a week after Yancoal announced its acquisition of an 80% stake in Queensland’s Kestrel Coal Mine in a USD2.4 billion deal, which remains subject to Foreign Investment Review Board and ACCC approvals.
The source: ASX
