South32 evacuated workers from one of its Illawarra coal sites in New South Wales last weekend due to potentially hazardous gas levels.
The company, a spin-out of BHP Billiton, said elevated gas levels were recorded at the Appin Area 7 coking coal mine on May 7 and all personnel were safely evacuated.
After South32 informed the NSW Department of Planning and Environment of the incident a prohibition notice was issued at the site.
Production at South32’s Illawarra metallurgical coal division is expected to be at least 10 per cent below the 2017 financial year guidance of 7.9 million tonnes because of the issue, according to the company.
“Production at the Area 7 and Area 9 longwalls, which form part of the broader Illawarra metallurgical coal operation, has been suspended until our investigation into the incident is completed,” South32 said in an ASX announcement.
“A revised production forecast for FY17 will be provided in due course, with the decrease expected to translate directly to sales given low inventory levels. A commensurate increase in unit costs is also anticipated.”
This is the latest issue to interrupt production at South32’s operations in Australia. In April, an underground fire temporarily affected operations at its Cannington mine in Queensland, delaying mineral extraction at the site.
South32 also reduced its production guidance for silver, lead and zinc following that incident.