Coal price drops don’t stop billions of dollars of Yancoal investment in Australia
Mining job security – the big winner in Yancoal cash investment strategy
Yanzhou Coal, one of China`s largest coal miners, is expected to ‘tip in’ $2.8 billion ($A3.2bn) into its Australian coal mining subsidiary Yancoal, in an effort to keep mining operations running and help save mining jobs, as coal prices continue to struggle.
Yancoal has seven mines in Australia, and recently the company made a statement saying it intends to raise $A2.3 billion through a subordinated capital notes rights offer to pay down its current debts, as well as use the cash to fund its existing mining operations in Australia.
Welcome news for Australian mining jobs
This is welcome news for the thousands of people employed by the company across its many mines.
The Chinese group, which owns 78 percent of Yancoal, has said it will “ensure Yancoal remains solvent,” for as long as it remains the majority shareholder.
It’s not been easy for Yancoal as it struggles to maintain it’s mining operations and Australian mining jobs – it has†suffered even bigger losses than its closest mining rivals New Hope Coal and Whitehaven Coal.
The global coal industry is in a slump at this time and coal markets have been battling a glut of excess tonnage hitting the market from mining operations in hubs like Australia.
The global trading price of thermal coal which is used to create electricity, and metallurgical coal which is consumed by steelmakers, has been†weakening for some time now.
This package of funding injection comes after Yanzhou Coal ditched a plan to buy out the minority 22% stake in its Australian arm earlier this year.
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