YANZHOU Coal Mining Co., China’s fourth-largest producer, yesterday abandoned a proposal to buy out its Australian unit Yancoal Australia Ltd., walking away from an all-scrip proposal to take the Australian coal producer private as prices for the fuel languish at multiyear lows.

    Yanzhou Coal, based in Shandong Province, last July announced plans to buy out minority investors in the Australian company — in which it holds a 78 percent stake — and delist the stock. Other shareholders include Singaporean commodities trader Noble Group Ltd.

    Analysts said the decision by Yanzhou to drop its bid for the company was unsurprising given continued falls in the price of coal, and subsequently, in the share prices of both companies. Coal markets have been hurt by a glut of raw material, as supply rises from mining operations in hubs like Australia and demand growth in Asia eases.

    Thermal-coal prices in Australia last week fell to around US$73 a metric ton, their lowest since late-2009.

    “Yanzhou today notified Yancoal that [it] no longer wishes to pursue with its indicative nonbinding proposal regarding the possible privatization of Yancoal Australia,” executives at Yancoal said in a statement to the Australian Securities Exchange, without elaborating further.

    Support from Noble Group, which hired Goldman Sachs Group Inc. as its adviser following news of the offer last year, would have been crucial to getting the deal completed. Noble holds about 13 percent of Yancoal’s stock. (SD-Agencies)