Yancoal Australia aims to buy a majority stake in Kestrel coal mine

The Kestrel underground coal mine, located 40km north of Emerald in Queensland's Bowen Basin, mainly produces hard coking coal with low ash content and high fluidity. As of last September, the mine held coal resources of 406 million tonnes, with 164 million tonnes marketable (100% Kestrel basis), Yancoal said.

Yancoal emphasizes that Kestrel is one of the most productive underground coking coal operations in Australia. In 2025, its run-of-mine production reached around 8.2 million tonnes, with 5.9 million tonnes saleable (100% Kestrel basis). This production rate underpins a "25-year life-of-mine plan, with potential for further extension", Yancoal stated in a statement.

All of Kestrel's products are freighted by rail to Gladstone Port in Queensland for worldwide customers. India is the mine's largest overseas market, followed closely by Northeast Asia, according to introduction on the mine operator's website.

Yancoal notes that the asset aligns with the "sustained steel demand growth in Asia and a constrained global supply pipeline". Considering its close proximity to Yancoal's other mines and infrastructure in Queensland, the Sydney-based company also expects the acquisition to provide opportunities for regional synergies.

As one of the largest coal producers and exporters in Australia, Yancoal has interests in seven producing mines in Queensland and New South Wales. In 2025, the company's attributable saleable production reached 38.6 million tonnes, with sales totalling 38.1 million tonnes (32 million tonnes being thermal coal and 6.1 million tonnes coking coal), its production report shows.

If successful, the acquisition should enrich Yancoal's coking coal portfolio, widening proportion of metallurgical coal in its total attributable sales volume from 16% in 2025 to 22% on a pro forma basis, the company calculates.

Yancoal expects to complete the acquisition by the end of the third quarter this year. Currently, the 80% share is owned by global private equity manager EMR Capital and Jakarta-based resources company PT Adaro Andalan Indonesia Tbk. The remaining 20% belongs to the coal wing of Japanese trader Mitsui & Co, headquartered in Tokyo.

Yancoal Australia is itself a subsidiary of Yankuang Energy Group, under the control of China's state-run energy giant Shandong Energy Group in Jinan in East China's Shandong province.

In recent years, Yankuang Energy has been actively developing new mines and expanding existing mines, as the group works to achieve a coal mining production capacity of 300 million tonnes/year by 2030.

According to information on the group's website, Yankuang Energy operates 43 coal mines in China and Australia, with a total capacity of 285.05 million t/y. For full-year 2025, Yankuang Energy's saleable coal production totaled 182.4 million tonnes, up 6.3% from the previous year, its operation report showed. No breakdown by mining company or location was given, however.

Written by Adrian Zhou, zhouwenhaoa@mysteel.com

Edited by Russ McCulloch, russ.mcculloch@mysteel.com