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Yancoal to Review Mine Expansion to Cut Costs on Weak Coal Price

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Aug. 20 (Bloomberg) -- Yancoal Australia Ltd., the third-biggest standalone coal producer in Australia, is reviewing expansion plans at its seven mines to help cut costs as commodity prices decline.

“Expansion plans across all mines will be reviewed and ranked to ensure that the appropriate capital expenditure discipline is maintained,” the Sydney-based company said today in a presentation sent to Australia’s stock exchange.

Coal prices fell during the first half as an economic slowdown crimped demand. Metallurgical coal, used to make steel, may remain weak in the current half, Yancoal said.

Coal production may be higher than last year, it said, as new mines began output. Yancoal, controlled by China’s fourth-largest coal producer Yanzhou Coal Mining Co., reported thermal coal sales of 1.9 million metric tons during the June quarter, 29 percent higher than last year, and coking coal sales of 2.1 million tons.

To contact the reporter on this story: Aibing Guo in Hong Kong at aguo10@bloomberg.net

To contact the editor responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net

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