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South32 reviews productivity of the Illawarra coal project

Published by , Editorial Assistant
World Coal,

South32 has concluded its review into Illawarra Metalurgical Coal’s operating systems and processes, and has completed remedial action required to safely and sustainably recommence production at the Appin mine following a staged ramp-up of activity through September.

Longwall 707 restarted production and the company plan to operate a single longwall at the Appin mine consistent with the prescribed ramp-up conditions. This plan will be adopted across the remainder of FY18, before returning to a two longwall configuration in the December 2018 quarter. Longwall 707 is expected to be completed during the June 2018 quarter, at which point the company will commence production at Longwall 902.

South32 Chief Executive Officer Graham Kerr said: ‘We have completed a detailed review of Illawarra Metallurgical Coal’s operating systems and processes to address the unacceptable levels of performance that have been achieved as the Appin Area 9 project ramped-up to capacity.”

“Longwall utilisation rates of 30% to 40% are significantly below industry benchmark levels and an opportunity exists for us to sustainably improve productivity in order to maximise the value of this high quality, long life resource.”

“While unit operating costs and profitability will be significantly impacted by a lower rate of production in FY18, a measured ramp-up of activity at the Appin mine will allow us to reset the operation’s culture, re-establish minimum performance criteria and drive productivity towards a more acceptable level.”

Illawara Metallurgical Coal produced 819 kt of coal during the September 2017 quarter (494 kt metallurgical coal, 325 kt energy coal). A longwall move is scheduled for the Dendrobium mine in the March 2018 quarter.

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