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The producer will also focus on increasing the amount of coal sold as metallurgical coal, it said.

“[Yancoal's] management is cautiously optimistic about the coal price outlook for both thermal and metallurgical coals. Recent coal pricing action suggests that the cycle lows for coal prices were experienced during the second half of 2012,” Yancoal said.

Spot prices for premium hard coking coal slumped to a 2012-low of $140 per tonne fob Australia in September, from a year-high of $226.50 per tonne in June.

Metal Bulletin’s low-vol coking coal index stood at $185.7 per tonne cfr China for the week ending February 22.

Yancoal posted earnings before interest, taxes, depreciation and amortisation (Ebitda) of $197.9 million for the year of 2012, down from $621.1 million in 2011.

“The significant decline in profit was due to lower coal prices, a strong Australian dollar, increased operating costs and unused take or pay obligations for port and rail infrastructure,” the company said in the statement.

Yancoal sold a total of 14.8 million tonnes of coal in 2012 and produced 14.7 million tonnes during the period.

“The short-term focus for the company is to reduce costs across all of the mines within the Yancoal portfolio. Lower costs will underpin the future of each of the mines ensuring their longer term lives,” The company said.