PERTH (miningweekly.com) – Coal miner Yancoal Australia has called for coal producers to reduce output to return balance to the markets.

During its half-year results, the ASX-listed Yancoal noted that both metallurgical and thermal coal producers had increased output in an effort to reduce their operating costs through the benefit of scale.

However, the company noted that while coal demand remained strong, the demand was currently being overwhelmed by the increased supply.

“For both metallurgical and thermal coal markets to return to balance, the market will require production cuts from some producers. At this stage, there is no sign of any production cuts, so the outlook remains weak,” the miner said.

Yancoal acting CEO Peter Barton also noted that the company itself would continue to encourage productivity gains and would attempt to reduce its costs across its mining operations.

“Yancoal has worked hard to respond to challenging market conditions. Prices remain the key driver of the company’s profitability at an operating level; however, our controllable costs are well managed and we continue to make good progress in lowering those costs.”

For the six months to June, Yancoal reported a loss after tax of A$749.4-million, with Barton attributing the loss to a net unrealised foreign exchange loss of A$492.7-million on the conversion of the US dollar debt resulting from the weakening of the Australian dollar against the greenback, as well as an impairment of mining tenements amounting to A$343-million.

Production for the first half of the year reached 10.7-million tonnes run-of-mine coal, and 7.6-million tonnes saleable product.

Meanwhile, the company announced on Monday the appointment of Reinhold Schmidt as CEO, effective from August 26.

Schmidt has over 20 years of experience in the mining industry and has, until recently, been the COO of Xstrata Coal Queensland. Prior to this, he was executive GM for the Wandoan project.