Zhitong Finance App News, Yancoal Australia (03668) issued an announcement regarding the Glencore Framework Coal Sales Agreement, Glencore Framework Coal Purchase Agreement, and Hunter Valley Sales Agreement (collectively referred to as such framework agreements). Since each of these framework agreements will expire on December 31, 2026, and the Company intends to continue the relevant continuing connected transactions after the end of 2026, on October 23, 2026, the Board of Directors decided to renew the agreement or set an annual limit for the following continuing connected transactions from January 1, 2027 to 31 December 2029 (as the case may be), subject to confirmation from Yankuang Energy, the controlling shareholder of the Company, and the relevant confirmation was obtained on October 30, 2026: (1) The Group decided to renew the agreement in accordance with the Glencore framework coal sales agreement Glencore (a subsidiary of the Company) sells coal; (2) the Group purchases coal from Glencore under the Glencore Framework Coal Purchase Agreement; and (3) the Group buys coal from Anotero (Glencore's wholly-owned subsidiary) in accordance with the Hunter Valley sales agreement only for mining operations in the Hunter Valley region.
The company's main business activity is the production of thermal coal and metallurgical coal. Glencore has been one of the company's main customers since 2017. The Company believes that by supplying coal to Glencore in the Company's daily and general business processes, the Company can maintain a good business relationship with Glencore, further expand its business operations and generate revenue.
The Group has purchased coal from Glencore and/or its subsidiaries and/or associated entities and is expected to continue to purchase coal from them to maintain customer relationships or meet specific customer requirements for coal (note that the Group does not produce certain specifications of coal). Taking into account the benefits of maintaining customer relationships and the fact that coal will be purchased at market prices, the Company believes that transactions under the Glencore Framework Coal Purchase Agreement are in the overall best interests of the Company and its shareholders.
The reason for entering into the Hunt Valley Sales Agreement and the business goal of Hunt Valley Sales Company is to promote the sale of coal produced by the Hunt Valley Joint Venture because the Hunt Valley Joint Venture is an unincorporated joint venture and is legally incapable of entering into a sales agreement on its own. The purpose of the arrangement under the Hunt Valley Sales Agreement is to enable the coal occupied by the relevant participants to be resold by the Hunt Valley Sales Company, and after the sale of the relevant coal is carried out, the Hunt Valley Sales Company will distribute all the money it receives to the participants. Therefore, Hunt Valley Sales does not operate to generate profits because Hunt Valley Sales does not retain any sales revenue it collects and does not collect any fees from participants for performing sales functions. In view of the above circumstances, the Company believes that the transactions under the Hunt Valley Sales Agreement are in the overall best interests of the Company and its shareholders.