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South32 announces March 2019 production reports

Coal News - Published on Mon, 22 Apr 2019

Image Source: south32.net
South Africa Energy Coal saleable production decreased by 9% to 18.3 million tonne in the nine months ended March 2019, albeit production improved during the March 2019 quarter as domestic sales volumes benefitted from a contract to sell lower quality stockpiled product. Notwithstanding the improved performance, disruptions caused by community protests, a delay in the implementation of a new shift pattern at Khutala and the slower than expected ramp-up of activity following the Klipspruit dragline’s return to service resulted in lower than planned volumes in the March 2019 quarter.

The dragline incident at Klipspruit has been confirmed as an insurable event and the volume and cost impact will be subject to an insurance claim. We now expect FY19 export production of 10.7 million tonne (versus prior guidance of 11.5 million tonne) and a larger decline in lower margin domestic production to 15.5 million tonne. We remain on track to transform the ownership of South Africa Energy Coal with binding bids expected in the June 2019 quarter. Once acceptable bids are received and evaluated, we expect to reclassify South Africa Energy Coal as an asset held for sale on the balance sheet and a discontinued operation in the income statement.

Illawarra Metallurgical Coal (100%) Illawarra Metallurgical Coal saleable production increased by 68% (or 2.033 million tonne) to 5.0 million tonne in the nine months ended March 2019 as the Dendrobium and Appin longwalls performed strongly. We also successfully renegotiated a new Appin Trades and Operators and West Cliff Coal Preparation Plant Enterprise Agreement during the March 2019 quarter, thereby concluding the renegotiation of all major labour agreements at the operation.

FY19 production guidance remains unchanged at 6.5 v as we commence the extraction of new panels at both Appin and Dendrobium in the June 2019 quarter, following the successful completion of two longwall moves. Our focus remains on achieving a substantial uplift in development rates at Appin in order to sustain the operation of two longwalls in parallel from H2 FY20.

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Posted By : Rabi Wangkhem on Mon, 22 Apr 2019
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