Illawarra Longwalls Performing Strong

Miners perform maintenance on a longwall shearer at South32’s Illawarra operations.
In its latest quarterly report, Australian miner South32 noted exceptional improvement from its longwall mining units at its Illawarra Metallurgical Coal, which allowed it to exceed prior-production guidance. Coal production during the last two quarters totals 3.84 million metric tons (mt) compared to 4.24 million tons for fiscal year 2018. The company is expecting 6.5 million mt for fiscal year 2019 with two longwall moves scheduled for the March 2019 quarter.

While metallurgical coal prices have softened a bit, Illawarra realized an average price of $207/mt during the second half of 2018. “We achieved a strong quarter of production, maintaining full-year guidance for all operations with the exception of Illawarra Metallurgical where improved longwall performance has underpinned a 7% increase to our prior estimate,” said Graham Kerr, CEO, South32. “The Dendrobium and Appin longwalls continued to perform strongly.” The company said it has stockpiled enough coal to cover the downtime from the two longwall moves.

“We also completed our review of the Eagle Downs metallurgical coal project’s development plan and commenced the feasibility study ahead of a final investment decision scheduled for the second half of 2020,” Kerr said. The company also said it finalized plans to return the Klipspruit dragline to service by the end of January, which will enable a strong recovery for export volumes at South Africa Energy Coal in the June half year. The company is currently trying to sell the South Africa Energy Coal business and said it expects binding bids by the end of the June half year.

The company’s South Africa Energy Coal production decreased 9% (or 1.25 million mt) to 12.2 million mt during the December 2018 half year. Export production was impacted when the Klipspruit dragline was taken down to repair structural damage to the boom in August 2018. Domestic production, however, benefited from the commencement of a contract to sell lower quality stockpiled product in the June 2018 quarter. The company said its fiscal year 2019 production guidance remains unchanged at 29 million mt (17.5 million mt domestic and 11.5 million mt export).

As featured in Womp 2019 Vol 02 -