Yancoal Australia Ltd — Interim / Quarterly Report 2021

Aug 19, 2021

Australian Securities Exchange, Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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Yancoal Australia Ltd ACN 111 859 119

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(Incorporated in Victoria, Australia with limited liability)

(Hong Kong stock code: 3668) (Australian stock code: YAL)

OVERSEAS REGULATORY ANNOUNCEMENT

This announcement is issued pursuant to Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

Please refer to the attached announcement which has been published by Yancoal Australia Ltd on the website of the Australian Securities Exchange on 19 August 2021.

By order of the Board Yancoal Australia Ltd Baocai ZHANG Chairman

Hong Kong, 19 August 2021

As of the date of this announcement, the executive Director is Mr. Ning Zhang, the non- executive Directors are Mr. Baocai Zhang, Mr. Cunliang Lai, Mr. Xiangqian Wu, Mr. Qingchun Zhao and Mr. Xing Feng and the independent non-executive Directors are Mr. Gregory James Fletcher, Dr. Geoffrey William Raby, and Ms. Helen Jane Gillies.

• For identification purposes only

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1 19 August 2021

Important Notice and Disclaimer

Acceptance - This presentation is issued by Yancoal Australia Limited ABN 82 111 859 119 (“Yancoal”).

By accepting, accessing or reviewing this presentation, you acknowledge and agree to the terms set out in this Important Notice and Disclaimer.

Summary of information - This presentation has been provided to you solely to convey information about Yancoal and its related entities, and their activities, for the half-year ended 30 June 2021. The information in this presentation is general in nature and does not purport to be complete, nor does it contain all the information which a prospective investor may require in evaluating a possible investment in Yancoal. It has been prepared by Yancoal with due care, but other than as required by law, no representation or warranty, express or implied, is provided in relation to the accuracy, correctness, fairness or completeness of the information. Statements in this presentation are made only as of the date of this presentation, unless otherwise stated, and the information in this presentation remains subject to change without notice. None of Yancoal, its representatives or advisers is responsible for updating or revising, or undertakes to update or revise, this presentation. Items depicted in photographs and diagrams are not assets of Yancoal, unless stated. This presentation should be read in conjunction with Yancoal’s Full Year Result for the period ended 31 December 2020 and other periodic and continuous disclosure information, lodged with the ASX and HKEX, which are available at www.asx.com.au and www.hkex.com.hk.

Industry data - Certain market and industry data cited or used in the preparation of this presentation may have been obtained from research, surveys or studies conducted by third parties, including industry or general publications. None of Yancoal, its representatives or advisers have independently verified any such market or industry data provided by third parties or industry or general publications, nor have those third parties or industry or general publications authorised or approved the publication of this presentation.

Not financial product advice or offer - This presentation is for information purposes only and is not a prospectus, product disclosure statement, pathfinder document for the purposes of section 734(9) of the Corporations Act or other disclosure document under Australian law, Hong Kong law or the law of any other jurisdiction. It is not, and should not be considered as, an offer, invitation, solicitation, advice or recommendation to buy or sell or to refrain from buying or selling any securities or other investment product or entering into any other transaction in any jurisdiction. It has been prepared without taking into account the objectives, financial or tax situation or needs of individuals. Readers should consider the appropriateness of the information having regard to their own objectives, financial and tax situation and needs, make their own enquiries and investigations regarding all information in this presentation including but not limited to the assumptions, uncertainties and contingencies which may affect future operations of Yancoal and the impact that different future outcomes may have on Yancoal, and seek legal and taxation advice appropriate for their jurisdiction.

Distribution - The release, publication or distribution of this presentation (including an electronic copy) outside Australia, New Zealand and Hong Kong may be restricted by law. If you come into possession of this presentation, you should observe such restrictions and should seek your own advice on such restrictions. Any non-compliance with these restrictions may contravene applicable securities laws.

Financial Data - Investors should note that this presentation contains pro forma historical and forecast financial information. The pro forma and forecast financial information, and the historical information, provided in this presentation is for illustrative purposes only and is not represented as being indicative of Yancoal’s views on its future financial condition and/or performance. Investors should note that Watagan Mining Company Pty Ltd (“Watagan”) (which owns the Ashton, Austar and Donaldson mines) was whollyowned but not controlled by Yancoal under applicable accounting standards, and not consolidated by Yancoal from 31 March 2016 up to and including 16 December 2020; Yancoal deconsolidated the financial results of Watagan as a subsidiary from its consolidated financial statements during this period. Investors should be aware that certain financial measures included in this presentation are ‘non-IFRS financial information’ under ASIC Regulatory Guide 230: ‘Disclosing non-IFRS financial information’ published by ASIC, and are not recognised under Australian Accounting Standards (AAS) and International Financial Reporting Standards (IFRS). The non-IFRS financial information/nonGAAP financial measures include EBITDA, net debt and others. Such non-IFRS financial information/non-GAAP financial measures do not have a standardised meaning prescribed by AAS or IFRS. Therefore, the non-IFRS financial information may not be comparable to similarly titled measures presented by other entities, and should not be construed as an alternative to other financial measures determined in accordance with AAS or IFRS. Although Yancoal believes these non-IFRS financial measures provide useful information to investors in measuring the financial performance and condition of its business, investors are cautioned not to place undue reliance on any non-IFRS financial information/non-GAAP financial measures included in this presentation.

Effect of rounding - A number of figures, amounts, percentages, estimates, calculations of value and fractions in this presentation are subject to the effect of rounding. Accordingly, the actual calculation of these figures may differ from the figures set out in this presentation.

Use of currency - All financial numbers presented are stated in Australian dollars (A$ or $) unless otherwise stated.

2

Important Notice and Disclaimer (Continued)

Reserves and Resources Reporting - In this presentation, references to mineral resources (“Resources”) and ore reserves (“Reserves”) for Yancoal are compliant with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2012 (“JORC Code”) and are measured in accordance with the JORC Code. The information in this Presentation that relates to Resources and Reserves has been previously disclosed to the market in the Coal Resources and Coal Reserves statement for the year ending 31 December 2020 dated 17 March 2021 (Resources and Reserves Statement) and is sourced from the information prepared and compiled by Competent Persons (as defined by the JORC Code), as disclosed and detailed in the Resources and Reserves Statement. Reserves and Resources for these mines are as at 31 December 2020. The information related to the Resources and Reserves have been prepared and compiled by persons who have the required qualifications and experience to qualify as Competent Persons (as that term is defined in the JORC Code). Yancoal is unaware of any new information or data that materially affects the information contained in the Resources and Reserves Statement. All material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed at the time of this presentation. References to Resources and Reserves for other assets, companies, countries, regions and basins are sourced from third parties and measured in accordance with their source data. Information in this presentation relating to Yancoal’s Resources and Reserves is extracted from information previously published by Yancoal and is available on the Yancoal and ASX website at www.yancoal.com.au and www.asx.com.au.

Past performance - Past performance, including past share price performance of Yancoal and pro forma financial information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of Yancoal’s views on its future financial performance or condition. Past performance of Yancoal cannot be relied upon as an indicator of (and provides no guidance as to) future Yancoal performance. Nothing contained in this presentation nor any information made available to you is, or shall be relied upon as, a promise, representation, warranty or guarantee, whether as to the past, present or future.

Future performance and forward-looking statements - This presentation contains forward-looking statements, forecasts, estimates, projections, beliefs and opinions (“ForwardLooking Statements”). Forward-Looking Statements can be identified by the use of terminology, including, without limitation, the terms 'believes', 'estimates', 'anticipates', 'expects', ‘projects’, 'predicts', 'intends', 'plans', 'propose', 'goals', 'targets', 'aims', 'outlook', 'guidance', 'forecasts', 'may', 'will', 'would', 'could' or 'should' or, in each case, their negative or other variations or comparable terminology. Forward-Looking Statements reflect expectations as at the date of this presentation, however they are not guarantees or predictions of future performance or events or statements of fact. They involve known and unknown risks, uncertainties and other factors, many of which are beyond Yancoal’s control, and which may cause actual results to differ materially from anticipated results, performance or achievements expressed or implied by the Forward-Looking Statements contained in this presentation. Other than as required by law, although they believe there is a reasonable basis for the Forward-Looking Statements, neither Yancoal nor any other person (including any director, officer or employee of Yancoal or any related body corporate) gives any representation, assurance or guarantee (express or implied) as to the accuracy, correctness or completeness of each Forward-Looking Statement or that the occurrence of any event, results, performance or achievement will actually occur. Except as required by applicable laws or regulations, Yancoal does not undertake to publicly update, revise or review any Forward-Looking Statements, whether as a result of new information or future events. Past performance cannot be relied on as a guide to future performance.

No liability - This document has been prepared on the basis of information available to Yancoal. To the maximum extent permitted by law, Yancoal (including its subsidiaries, related bodies corporate, shareholders, affiliates, advisers and agents):

 disclaims any obligations or undertaking to release any updates or revisions to the information to reflect any change in expectations or assumptions;

 does not make any representation or warranty, express or implied, as to the accuracy, reliability, fairness, completeness of such information or opinions or that it contains all material information about Yancoal or which a prospective investor or purchaser may require in evaluating a possible investment in Yancoal or acquisition of shares, or likelihood of fulfilment of any Forward-Looking Statement or any event or results expressed or implied in any Forward-Looking Statement; and

 disclaims all responsibility and liability arising out of fault or negligence for any loss arising from the use of information contained in this presentation, regarding ForwardLooking Statements or any information, statements, opinions or matters, express or implied, contained in, arising out of or derived from, or for omissions from, this presentation.

The data and information provided by GlobalCOAL may not be copied or used except as expressly permitted by GlobalCOAL in writing. The data and information provided by Platts may not be copied or used except as expressly permitted by Platts in writing.

The data and information provided by Argus/McCloskey may not be copied or used except as expressly permitted by Argus/McCloskey in writing.

3

Robust performance up cycle commences

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Effective COVID-19 response and
Sustained safety performance $1.78 billion Revenue
8.4 TRIFR
17.5Mt Attributable Saleable $406 million Operating EBITDA
Production & operating margin of 23%
A$66/tonne Operating Cash Cost Operating cash flow of $179 million
Payment complete on additional
Cash position of $539 million
10% stake in Moolarben
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Safety Performance

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YAL SITES 12-mth Rolling TRIFR & LTIFR
•
Reintroduction of COVID-19
12 Month Rolling TRIFR Weighted Industry Benchmark TRIFR
12 Month Rolling LTIFR
12
response plans late in 2H 2021.
•
No known COVID-19 cases at
10
the mines^, but lockdowns and
8
proactive isolations taking place
6
in regional areas.
4 •
Met the additional challenges
2 and kept key safety stats below
our industry benchmark.
0
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Ongoing focus resulted in a better than industry benchmark performance

• TRIFR = Total Recordable Injury Frequency rate, and LTIFR = Lost Time Injury Frequency Rate. Attributable TRIFR includes Moolarben, Mount Thorley Warkworth, Stratford Duralie, Yarrabee and Corporate; it excludes Joint venture operated Middlemount and Hunter Valley Operations as well as Watagan (up to 16 December 2020). From January

• 5 2021 onwards the Yancoal TRIFR and Industry weighted average were revised to include the Watagan assets. Prior periods may be revised for reclassification of past events. The Industry weighted average combines proportional components from the relevant New South Wales and Queensland industry averages.

• ^ As at 12[th] August 2021, the date this presentation was prepared

Environment, Safety and Governance

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• During H1 2021 Yancoal:

• Implemented a new process to maintain

• corporate oversight of potential mining activities that could impact Aboriginal cultural heritage sites with moderate to high archaeological significance, and

• Continued to roll out its third party Independent

• Environmental Assurance Audit program, with audits undertaken at Cameby Downs, Stratford and Duralie during the period.

• Yancoal is taking steps towards a lower emissions

• profile through long-term concepts. Investigation into opportunities such as replacing dieselpowered mining fleet or introducing renewable power generation to the mine sites are examples of potential future endeavours.

• Link to Yancoal’s ESG report 2020

Founded on shared values, focused on Australian futures

6

Controllable and Uncontrollable factors

Operating factors	1H 2021	1H 2020	Change	Observations
Average realised sales price (A$/t)	94	94	0%	Higher met coal proportion, but lower met coal price
Attributable production (million tonnes)	17.5	19.0	-8%	Weather disruptions impacted production
Attributable sales (million tonnes)	17.2	17.5	-2%	Sales volume closely followed production volume
Operating cash costs (A$/t) *	66	63	5%	Diesel price and lower production affected unit costs.

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• Operating cost costs revised to include other operating expenses. Prior period figures have been similarly adjusted.

7

Coal market conditions

• Average realised thermal coal price of A$89/t was up

• 1% from 1H 2020 as supply constraints saw international indices recover from the lows in 2H 2020.

• Average realised metallurgical coal price of A$122/t was down 15% from 1H 2020, but price index strength late in the period bodes well for 2H 2021.

Thermal benchmarks (US$/t), YAL Average thermal coal sale price (US$/t)*

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140
120
100
80
60
40
20 GlobalCoal NEWC 6,000kCal, US$/t
Argus / McCloskey API5 5,500kCal, US$/t
YAL Average thermal coal sale price, US$/t
0
$/t
Source: Argus/McCloskey, GlobalCOAL
Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21
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Met. coal benchmarks (US$/t) & YAL Average met. coal sale price (US$/t)*

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175
150
125
100
75
50
25 Platts Low Vol PCI FOB Aust., US$/t
Platts Semi-Soft FOB Aust., US$/t
YAL Average met. coal sale price, US$/t
0
$/t
Source: Platts
Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21
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The thermal coal index price differential creates an opportunity to pursue.

• Average sale price is the average price in AUD term for each half-year period converted to USD terms at the average AUD:USD exchange for the period

8

Product mix

• Diverse customer base limits the impact from disruption from any one market.

• Sales volumes weighted to the second half has been the pattern in recent years.

• The metallurgical coal ratio lifted in 1H 2021.

1H 2021 1H 2020 % Change

Thermal coal A$/t 89 88 1% price achieved Metallurgical coal A$/t 122 140 -15% price achieved Combined coal A$/t 94 94 0% price achieved

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Attributable sales volume [ ]
(Million tonnes)
25
Thermal Metallurgical
20
2.3
2.7 1.9
2.7
15 2.8
10
17.2
16.4 16.5
14.5
13.7
5
0
1H 2019 2H 2019 1H 2020 2H 2020 1H 2021
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The proportion of revenue from any one country is usually less than 25%

** Excludes purchased coal tonnage. Excludes Middlemount (equity-accounted) and Watagan (equity-accounted from 31 March 2016 up to and including 16 December 2020).

9

Coal Production temporarily impacted

**Attributable Saleable Production by Asset ***

(Million tonnes)

• The decrease in attributable saleable coal

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Moolarben MTW HVO
Yarrabee Stratford Duralie Ashton and Austar
Non-attributable
30
26.4 26.2
25.7 25.6
25
23.2
20 19.0 19.3
17.8 17.8
17.5
15
10
5
0
1H 2019 2H 2019 1H 2020 2H 2020 1H 2021
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• largely stems from wet weather disruptions in 1H 2021 in NSW; most notably at two of the three large-scale, low-cost, open-cut mines -

Mount Thorley Warkworth (MTW) and Hunter Valley Operations (HVO).

• 2021 guidance of around 39Mt of attributable saleable coal production requires limited production disruptions in 2H 2021.

• The spread of COVID-19 to regional areas and the resulting lockdowns have the potential to affect production expectations.

Production recovery requires steady production for the rest of the year

• Attributable figures include: Mount Thorley Warkworth (82.9%); Hunter Valley Operations (51%); Stratford Duralie (100%), Yarrabee (100%) and Moolarben (81% - up to and including 30 November 2018, then 85% up to and including 31 December 2019, then 95% thereafter). Note the economic benefit from Moolarben increased from 85% to 95% from 1 April 2020 onwards, with the 3 month difference captured in the transaction terms. Watagan contribution changes from equity accounted to attributable from 17 December 2020 onwards.

10

Unit costs fluctuate on uncontrollable elements

Cash operating costs (per production tonne)

(A$/tonne)

Cash operating costs Royalty Implied operating cash margin

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140
120
100
53
25
24 21
80
11
60
40
62 66 63 66
55
20
0
1H 2019 2H 2019 1H 2020 2H 2020 1H 2021
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• Cash operating costs, A$66/tonne, increased due to several factors including diesel price, demurrage costs, and reduced output.*

• 2021 figures include the Ashton underground mine which was previously equity accounted.

• Unit costs can improve in 2H 2021 as production volumes increase, but external risk factors such as COVID-19 restrictions are present.

• One component of the higher unit costs is the ‘wash harder’ strategy. We spend more to upgrade the coal and capture the price arbitrage for higher energy thermal coal.

Unit costs increased from 2H 2020, but so did the implied operating margin

• Operating cash costs include mining, processing, and logistics charges to the port, it excludes royalties. The 2020 guidance and past periods have been restated to include other operating expenses. All reported figures are on a consistent basis.

11

Financial Summary – Reduced sales volume affect

Income Statement ($ millions)	1H 2021	1H 2020	Change	Observations
Revenue *	1,775	1,969	194	Lower coal sales volumes in 1H 2021
Operating EBITDA	406	488	82	Lower revenue directly impacts the EBITDA
Depreciation and amortisation	-397	-386	11	Steady period to period
Operating EBIT	9	102	93	Replicates the revenue impact at the EBITDA level
Net Profit / (Loss) after Tax	-129	605	734	Includes one-off, non-cash, non-operating items

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Mining and rehabilitation work continue through the coal price cycle at all our assets

*Includes change in royalty accounting

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Price, Revenue and EBITDA

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Revenue and Average realised price EBITDA and Margin
(A$ Million) | (A$/tonne) (A$ Million) | (%)
Revenue Average selling price, A$/t Operating EBITDA EBITDA Margin
3,500 1,400
124 40%
3,000 1,200
34%
100
2,500 2,350 94 94 1,000 940
2,109
1,969 25%
2,000 800
71 1,775 714 23%
1,504
1,500 600 16%
488
406
1,000 400
260
500 200
- -
1H 2019 2H 2019 1H 2020 2H 2020 1H 2021 1H 2019 2H 2019 1H 2020 2H 2020 1H 2021
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Rebound in realised coal price directly affects Revenue and EBITDA

13

Profit / (Loss) After Tax can include non-operating items

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Profit / (Loss) after tax Operating cash flow
(A$ Million) (A$ Million)
Profit / (Loss) after tax Operating cash flow
1,000 1,000
605
564
500
783
800 765
155
-
600
(129)
505
(500)
400
(1,000)
179
200
(1,500)
100
(1,645)
(2,000) -
1H 2019 2H 2019 1H 2020 2H 2020 1H 2021 1H 2019 2H 2019 1H 2020 2H 2020 1H 2021
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Operating cash flow reflects the coal price movement

14

Fiscal position affected but not compromised

Cashflow and Balance Sheet	1H 2021	2H 2020	Change	Observations
Operating cash flow ($ million)	179	100	79%	Operating cash flow better than the 2H 2020 trough
Cash at end of period ($ million)	539	637	-15%	Final $100 million payment for Moolarben stake made in 1H 2021
Gearing ratio (%) *	40%	41%	-	Gearing reduction is ongoing
Leverage ratio (x) **	5.2	4.8	-	Change in the Operating EBITDA the main factor

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Yancoal continually invests in its assets and infrastructure to maintain output and performance

• Gearing calculated as the ratio of Net Debt to Net Debt plus Equity

15

** Leverage ratio calculated as the ratio of Net Debt to Operating EBITDA on a rolling 12 month basis

Debt and Distributions

Annual Net Debt* and Gearing Ratio[]**

(A$ Million) | (%)

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Net debt, A$ mn Net gearing, (%)
4,000
41%
40%
3,500
32%
3,000
29% 29%
2,500
2,000
1,500
1,000
500
2,917 2,536 2,697 3,568 3,436
-
1H 2019 2H 2019 1H 2020 2H 2020 1H 2021
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• From 2H 2020, the debt and gearing levels include Watagan components following the reconsolidation.

• $924 million was returned to shareholders during 2019-2020.

• Although coal prices are rebounding, debt reduction and a prudent approach to the financial position remains appropriate at this time. No interim dividend will be paid.

$539 million in cash and equivalents, over $800 million in undrawn debt ^

• Net debt does not include debt and earnings associated with Watagan arrangements between 2016 and 2019.

• ** Gearing calculated as the ratio of Net Debt to Net Debt plus Equity ^ As at 30 June 2021

16

Guidance for 2021

Guidance component	2020 Outcome	Original 2021 Guidance	Current 2021 Guidance
Attributable saleable		Around	Around
coal production	38.3 million tonnes	39 million tonnes	39 million tonnes
Attributable cash
operating cost	$59/tonne	$60 to 62/tonne	$62 to 64/tonne
(excl. government royalties) *
Attributable capital expenditure	$279 million	$360 to 380 million	$360 to 380 million

The spread of COVID-19 to areas near our mines has increased the instances of workers not being able to attend site as they follow Government protocols. The impact of COVID19 restrictions through the remainder of the year has the potential to influence production and unit costs. Fortunately international coal price indices are robust at this time.

• 2020 Attributable cash operating cost guidance restated to include other operating expenses; this figure is consistent with the reported outcome and the 2021 guidance.

17

The case for investment

 Three low-cost, large-scale assets underpin the business  The capability to blend and wash coal products to maximise the market opportunity  Diverse customer base continues to demonstrate appetite for Yancoal product  Balanced approach to asset reinvestment, debt optimisation and distributions  Capturing further value-add growth opportunities remains a key objective

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18