To purchase this space contact Gordon

Image: South32

South32 is on track to return to a three-longwall configuration at Illawarra Metallurgical Coal in New South Wales during the June quarter.

The company progressed its study to maximise long-term value following strong longwall performance at both Dendrobium and Appin.

South32 also reported an increase in saleable production by 12,000 tonnes to 5.1 million tonnes at Illawarra in the nine months ending in March.

The achievement followed a longwall move at Dendrobium during the March quarter.

Its total coal production, however, slid by 16 per cent from the December quarter to 1.359 tonnes in the March period.

South32 flagged challenging strata conditions to commence its longwall operations over the June quarter, but has kept its 2020 financial year guidance unchanged at seven million tonnes.

The company also reduced Illawarra’s sustaining capital expenditure by 1 per cent to $US183 million ($288.1 million) due to market conditions.

This measure is replicated across South32’s global operations, with South32 expecting to reduce its controllable costs starting the 2021 financial year.

“We have responded to the COVID-19 pandemic by introducing a number of measures aligned to our priorities of keeping our people safe and well, maintaining reliable operations and supporting our communities,” South32 chief executive Graham Kerr said.

“We have acted to protect our strong financial position, reducing capital and exploration expenditure, suspending our on-market share buy-back and commencing a group wide review aimed at delivering a reduction in controllable costs.”

South32 removed its guidance for the South African and Colombian operations as it lowered the 2020 financial year production guidance at Australia Manganese by 5 per cent.

This is attributed to restrictions aimed at containing the spread of coronavirus.

Conversely, South32 experienced a 4 per cent increase in alumina production, achieving record year to date production at Brazil Alumina and maintaining higher rates of calciner availability at Worsley Alumina in Western Australia.

The calciner maintenance impacted Worsley’s production, lowering its sales by 12 per cent during the March quarter.

The company is still confident it will approach Worsley’s 2020 financial year guidance of 3.965 million tonnes, subject to coronavirus developments.