Highlights

• Yancoal completed the acquisition of an 80% interest in the Kestrel mine on 1 October 2026 for US$1.85 billion upfront.

• Up to US$550 million of contingent consideration depends on the benchmark price exceeding US$225 per tonne within five years.

• June quarter attributable saleable coal production reached a quarterly record of 10.8 million tonnes, up 15% on the prior-year quarter.

• Cash of A$2,094 million against A$60 million of lease liabilities left net cash of A$2,034 million at 30 June.

Yancoal Australia Ltd (ASX:YAL) now owns 80% of one of Queensland's long-life metallurgical coal mines. The company completed the Kestrel Coal Mine acquisition on 1 October 2026, after announcing it in April, and will recognise its share of Kestrel's production, revenue and earnings from that date. Shares were trading at A$6.02 on 23 October 2026, up 2.38%.

Kestrel Deal Closes With Debt Funding in Place

Yancoal acquired the entire share capital of Kestrel Coal Group, which holds the 80% interest in the Bowen Basin mine. Mitsui, the joint venture partner, retains the other 20%. The upfront cash price is US$1.85 billion, subject to completion adjustments, including deduction of a US$40 million signing deposit.

The company is paying from available cash and an initial drawdown on a five-year US$1.2 billion syndicated acquisition loan, part of which is expected to retire existing Kestrel group debt. A separate five-year US$200 million working capital facility remains undrawn.

A further payment of up to US$550 million is contingent. It applies only if the relevant benchmark coal price exceeds US$225 per tonne in nominal terms in any of the first five years after completion. Yancoal has said the acquisition lifts its pro forma metallurgical coal share to 22%.

A Record Quarter Before the Deal Closed

The acquisition follows a strong June quarter. Attributable saleable coal production reached 10.8 million tonnes, a quarterly record, up 20% on the March quarter and 15% on a year earlier. First-half attributable saleable production totalled 19.8 million tonnes, up 5%.

Attributable sales were 11.6 million tonnes, made up of 9.8 million tonnes of thermal coal and 1.8 million tonnes of metallurgical coal. The average realised price was A$160 per tonne, up 13% on the June 2025 quarter, with thermal at A$149 and metallurgical at A$219.

Half-Year Profit Dented by One-Off Charges

For the six months to 30 June 2026, revenue under accounting standards was A$3,024 million, up 13%, and operating EBITDA rose 29% to A$767 million. Net profit after tax fell 90% to A$17 million. Before non-recurring items it was A$73 million, down 55%.

Non-recurring items totalled a A$272 million pre-tax loss, mainly a A$188 million hedge reserve recycling and a A$49 million impairment at Middlemount. The board declared a fully franked interim dividend of 7.00 cents per share, or A$92 million, with a record date of 3 September and payment on 18 September 2026.

Guidance and Approvals Still to Come

Guidance excludes Kestrel. Attributable saleable production is expected in the upper half of the 36.5 million to 40.5 million tonne range, and cash operating costs in the upper half of A$90 to A$98 per tonne, largely because of diesel prices. Capital expenditure guidance was cut to A$600 million to A$750 million from A$750 million to A$900 million, mainly on timing.

At the half-year, the company was awaiting an Independent Planning Commission determination on the Hunter Valley Operations mine life extension, with federal approval expected by the end of 2026. It cautioned there is no guarantee the extension will be granted. Ashton is scheduled to stop mining from early 2028. A shareholder circular on the Kestrel acquisition is expected by 23 November 2026.