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Illawara Metallurgical Coal hit by difficult geology

Published by
World Coal,

South32 recorded a substantial fall in metallurgical coal production from its Illawarra Metallurgical Coal operations on the back of challenging geology at the Apin Area 9 longwall and an extended step-around at Apin Area 7.

Saleable production fell by 26% as a result to 1.9 million t. This included 1.4 million t of metallurgical coal and 0.5 million t of thermal coal.

The difficulties are Appin also hit unit costs, the company said. “The temporary disruption to production at Appin and the operations high fixed cost base does mean that Illiawarra Metallurgical Coal unit cost guidance of US$71 per tonne will not be achieved until the June 2017 half-year with costs to be US$4 per tonne higher in the December 2016 half year,” the company said.

Production for FY2017 was also revised down on the back of the weak quarterly production to 9 million t from 9.3 million t. No further operational difficulties are anticipated through the rest of the year, although two longwall moves are scheduled for 1Q17.

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