Yancoal Australia, the country's largest independent coal miner, went into a surprise trading halt this morning after Chinese parent Yanzhou Coal Mining reported a quarterly loss blamed partly on the Australian operations.


Yancoal requested a two-day halt "following broker reports regarding its third quarter results". That was a reference to the September earnings update given on Friday by Yanzhou (which owns 78 per cent of Yancoal), including a ¥295 million ($38 million) net loss excluding forex gains and one-off items. Yanzhou also reported its long-term borrowings had increased after Yancoal Australia partially delayed a loan payment of ¥5.5 billion.


A clarifying statement from Yancoal is expected imminently. Hong Kong-based commodities analyst Helen Lau, at UOB Kay-Hian, told Bloomberg that Yancoal's Australian coalmines "hit Yanzhou Coal hard in the quarter".


Morgan Stanley analysts yesterday noted Yancoal Australia sales were flat, quarter-on-quarter, even after incorporating increased production from the integration of Gloucester Coal, completed in July.


Ten days ago Yancoal's own September quarter update disappointed local analysts, with RBS Morgans' Tom Sartor downgrading his earnings forecasts for fiscal 2012-15 based on lower coal prices and an estimated $26 million in charges for unused Newcastle Coal Infrastructure Group port capacity. Mr Sartor expected the company to report a net loss of $70 million in 2011-12, before one-off items and after paying preference dividends.


"Weakening demand and pricing for both thermal and the intermediate met coals has deteriorated," he wrote last Thursday. "Sales are the problem with around 9 per cent of [Yancoal's] quarterly production effectively stockpiled as notes difficulty in placing the some of its niche and intermediate met coals."


Yancoal shares were suspended at $1.03, down 8 per cent from the $1.12 before release of the September quarterly.