South32 Limited - Illawarra Metallurgical Coal Update
Release Date: 13/10/2017 08:00:00 Code(s): S32
Illawarra Metallurgical coal update
(Incorporated in Australia under the Corporations Act 2001 (Cth))
(ACN 093 732 597)
ASX / LSE / JSE Share Code: S32
13 October 2017
ILLAWARRA METALLURGICAL COAL UPDATE
South32 Limited (ASX, JSE, LSE: S32; ADR: SOUHY) (South32) announced today that it has
concluded its review into Illawarra Metallurgical 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 today and we 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 we 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 project1 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.”
Illawarra Metallurgical Coal produced 819kt of coal during the September 2017 quarter (494kt
metallurgical coal, 325kt energy coal). A longwall move is scheduled for the Dendrobium mine in
the March 2018 quarter.
South32 is a globally diversified mining and metals company with high quality operations in
Australia, Southern Africa and South America. Our purpose is to make a difference by developing
natural resources, improving people’s lives now and for generations to come. We are trusted by
our owners and partners to realise the potential of their resources. We have a simple strategy to
maximise the potential of our assets and shareholder returns by optimising our existing operations,
unlocking their potential and identifying new opportunities to compete for capital.
1. In June 2012, the BHP Billiton Board approved a US$845 million investment to sustain operations at Illawarra
Metallurgical Coal by establishing a replacement mining area at Appin mine (Appin Area 9 project). The project was
completed in the March 2016 quarter, at which point it replaced production from the West Cliff mine.
Registered Office: Level 35, 108 St Georges Terrace, Perth Western Australia 6000, Australia
ABN 84 093 732 597 Registered in Australia
Alex Volante Rob Ward
T +61 8 9324 9029 T +61 8 9324 9340
M +61 403 328 408 M +61 431 596 831
E Alex.Volante@south32.net E Robert.Ward@south32.net
Hayley Cardy James Clothier
T +61 8 9324 9008 T +61 8 9324 9697
M +61 409 448 288 M +61 413 319 031
E Hayley.Cardy@south32.net E James.Clothier@south32.net
Further information on South32 can be found at www.south32.net.
JSE Sponsor: UBS South Africa (Pty) Ltd
13 October 2017
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