The Yancoal Australia Ltd (ASX: YAL) share price is on watch this morning after the Aussie coal producer released its 2018 coal resources and reserves update late yesterday evening.
What are the key takeaways from Yancoal's update?
The company's voluntary announcement reported year end; Measured, Indicated and Inferred Coal resources of 6,442 megatonnes (Mt), Recoverable Proved and Probable Coal Reserves of 1,240Mt and Marketable Proved and Probably Coal Reserves of 891Mt.
The company reported total non-production changes to measured resources of 245Mt and 178Mt in its Warkworth and Mt Thurley operations, which was marginally offset by declines in Moolarben and HVO.
Based on Yancoal's ownership percentage of each resource, Australia's largest pure-play coal producer saw total attributable resource changes of 210.4Mt for the year ended 31 December 2018, mostly due to non-production in indicated resources.
Is Yancoal in the buy zone?
The Yancoal share price is down more than 10% this year and has fallen 18% in the last month alone while it's been a similar story for fellow coal miners Whitehaven Coal Ltd (ASX: WHC) and New Hope Corporation Ltd (ASX: NHC) in 2019 as global economic headwinds build and operational challenges continue to threaten.
For its part, Yancoal tripled its profit in its February half-year results and is set to pay investors a special dividend on 30 April 2019. This record result was largely driven by higher global coal prices which have boosted underlying revenue and kept margins high in the last 6-12 months.
The major long-term risk I see facing Aussie coal producers is the phase-out of coal as a primary energy source in Australia in coming years.
With the possibility of a Federal Labor government being in power in the second half of the year, and a likely tilt towards more clean energy options as a result, I think New Hope's future growth prospects could be limited.
For investors who are willing to roll the dice and venture into new industries, this top-rated growth stock is in the buy zone and could be set to surge higher in 2019.
