South32 NSW coal mine output to be lower
Full-year production at South32's Illawarra Metallurgical Coal operations is likely to drop sharply after operations at one of the site's two mines remained suspended for an extended period.
SYDNEY - [AAP] Full-year production at South32's (ASX: S32) Illawarra Metallurgical Coal operations is likely to drop sharply after operations at one of the site's two mines remained suspended for an extended period.
The diversified miner now expects to produce 4.5 million tonnes of coal from Illawarra, where operations at the Appin mine have been repeatedly affected by a build-up of methane gas over the last 18 months.
The facility produced 7.07 million tonnes of coal last year.
Operations were partially restarted in October with the resumption of one longwall at the Appin colliery.
"We expect to return the Appin colliery to its prior two longwall configuration in the December 2018 quarter, after which we intend to ramp-up Illawarra Metallurgical Coal production safely and sustainably towards historical rates of more than eight million tonnes per annum," chief executive Graham Kerr said in an investor briefing.
The operating unit cost at Illawarra is expected to jump to $US130 a tonne this financial year, compared to $US80 a tonne in FY17.
South32 also lowered its sustaining capital expenditure to $US470 million for the current year, down from an earlier target of $US500 million.
About two thirds of the reduction related to lower planned expenditure at Illawarra, due to underground development at the Appin mine being deferred.
The miner reaffirmed its 2017/18 production guidance for all its other operations.
By 1330 AEDT, South32 shares were up 3.2 per cent to $3.37 in a weak Australian market.
© [2017] Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.
This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.
