South32 drops production guidance at Illawarra coal mine

Source: South32

South32 has lowered its production guidance at the Illawarra coal operation in New South Wales following ongoing issues at the mine this year.

Production has been hampered at the Illawarra operation during 2016, including the temporary suspension of its Appin Area 9 longwall during October. Output was also hit by lower rates of production at the Appin Area 7 longwall.

As a result, the miner, which was formed after being spun-out from BHP Billiton, advised that production of saleable coal at Illawarra would now be 7.9 million tonnes in the 2017 financial year, down from the original guidance of 9.5 million tonnes and the 8.4 million tonnes produced in 2016.

South32’s new guidance includes 6.4 million tonnes of metallurgical coal and 1.5 million tonnes of thermal coal.

“While ground conditions at the Appin Are 9 longwall have stabilised, additional work is being undertaken to recondition the maingate roadway to ensure the safe extraction of the 901 panel,” South32 said in an ASX statement.

“At Appin Area 7, production continues to be progressively ramped-up to ensure safe levels of gas are maintained.”

South32 also expects cash costs will be higher in 2017, forecasting expenditure of US$83 per tonne compared to US$80 in the previous year.

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