PERTH (miningweekly.com) – Diversified miner South32 has lowered its energy coal and alumina production expectations for the full year, following a tough March quarter.
Energy coal production for the quarter declined by 1% on the previous quarter, to 6.3-million tonnes, while metallurgical coal production was down 37% to 990 000 t.
South32 said on Thursday that disruptions caused by community protests at its South African energy coal operations, as well as a delay in the implementation of a new shift pattern at the Khutala operation and the slower-than-expected ramp-up of activity following the Klipspruit dragline’s return to services, resulted in lower-than expected production.
Production at the Illawarra metallurgical coal operation, in Australia, was impacted by longwall moves at the Appin and Dendrobium mines, which were completed at the end of the quarter.
The projected energy coal production from South Africa has been reduced by 11% for the full 2019, to 26.2-million tonnes, with export expectations also reducing by 7% to 10.7-million tonnes, following community protests.
Production expectations at Illawarra metallurgical coal have remained unchanged at 6.5-million tonnes.
Alumina production in the three months under review declined by 13%, compared with the second quarter, to 1.2-million tonnes as boiler performance and power outages impacted on the Brazil Alumina assets, while load-shedding events in Mozambique contributed to a 2% decline to 242 000 t in aluminium production.
Manganese ore production was down 5% on the previous quarter, to 1.3-million tonnes, but South32 CEO Graham Kerr noted that the company had achieved record year-to-date ore production from the Australia manganese operations.
“We achieved record year-to-date ore production at Australia manganese and increased production guidance at both our manganese ore operations for the full 2019 as we responded to favourable market conditions,” Kerr said.
The Australia manganese guidance has been increased by 4%, to about 3.5-million tonnes for the full year, while expectations from the South Africa operation are also 4% higher at around 2.1-million tonnes.
However, Kerr noted that South32 had lowered the production guidance at the Worsley Alumina operation, as the company focused on improving calciner performance to sustainably achieve nameplate capacity.
The guidance for the Worsley alumina project has also been dropped by 4%, to some 3.7-million tonnes, while the Brazil alumina guidance has been reduced by 5% for the full year, to 1.2-million tonnes.
“We remain focused on mitigating inflationary pressure and have maintained 2019 unit cost guidance for all our operations. We continue to reshape our portfolio having committed to the final year of our Trilogy Metals option, retaining the right to earn a 50% interest in the Upper Kobuk mineral projects,” said Kerr.
He noted that the divestment of the South Africa energy coal unit was also on track, with binding bids expected in the June quarter.
“Once an acceptable bid is received and evaluated, we expect to reclassify the operation as held for sale.”