South32 Limited Illawarra Metallurgical Coal Update (0506S)
16 December 2016 - 6:00PM
UK Regulatory
TIDMS32
RNS Number : 0506S
South32 Limited
16 December 2016
16 December 2016
ILLAWARRA METALLURGICAL COAL UPDATE
South32 Limited (ASX, JSE, LSE: S32) (South32) advises that
saleable coal production of 7.9Mt is anticipated at its Illawarra
Metallurgical Coal operation in FY17, including 3.6Mt in H1 FY17.
While ground conditions at the Appin Area 9 longwall have
stabilised, additional work is being undertaken to recondition the
maingate roadway to ensure the safe extraction of the 901 panel. At
Appin Area 7, production continues to be progressively ramped-up to
ensure safe levels of gas are maintained.
As a result, Illawarra Metallurgical Coal sales of 8.1Mt are now
anticipated in FY17, while our average realised hard coking coal
sales price will continue to reflect the premium low volatile index
on a Month -1 (prior month) basis.
On the basis of unchanged assumptions for foreign exchange rates
and coal prices, an average Operating unit cost (including
Sustaining capital expenditure)(1) of approximately US$86/t is now
anticipated for Illawarra Metallurgical Coal in H1 FY17 (previously
US$75/t). This cost is forecast to decline towards US$80/t in H2
FY17 (previously US$71/t) for an average Operating unit cost
(including Sustaining capital expenditure) of US$83/t in FY17.
Illawarra Metallurgical FY16 H1 FY17e H2 FY17e FY17e
Coal
Revised guidance
Metallurgical coal production
(kt) 7,059 2,740 3,620 6,360
=============================== ====== ========= ========= ======
Metallurgical coal sales
(kt) 6,984 2,780 3,750 6,530
=============================== ====== ========= ========= ======
Energy coal production
(kt) 1,307 900 640 1,540
=============================== ====== ========= ========= ======
Energy coal sales (kt) 1,333 950 610 1,560
=============================== ====== ========= ========= ======
Total coal production
(kt) 8,366 3,640 4,260 7,900
=============================== ====== ========= ========= ======
Total coal sales (kt) 8,317 3,730 4,360 8,090
=============================== ====== ========= ========= ======
Operating unit cost,
incl. Sustaining capital
expenditure (US$/t)(1) 80 86 80 83
=============================== ====== ========= ========= ======
With the completion of the 901 panel and the associated release
of ground stresses, a strong improvement in longwall availability
and cutting rates is anticipated in FY18 with total saleable
production forecast to exceed 9.0Mt. Consequently, Operating unit
costs (including Sustaining capital expenditure)(1) are forecast to
decline towards approximately US$77/t given the operation's high
fixed cost base.
Restated FY17 production guidance incorporates a longwall move
for each of the March and June 2017 quarters. To allow comparison
to prior guidance, the various unit cost estimates do not take
account of currently elevated coal prices, which increase royalty
rates, and changes in the Australian dollar to US dollar rate,
which has remained persistently above 0.72. FY17 Operating unit
cost, including Sustaining capital expenditure, guidance for our
upstream operations will be updated when we report H1 FY17
financial results and will incorporate revised foreign exchange
rate and price assumptions.
Notes:
1. Operating unit costs, including Sustaining capital
expenditure, include royalties and the influence of exchange rate
assumptions, and are based on: an average blended coal price of
US$83/t for Illawarra Metallurgical Coal; and an AUD:USD exchange
rate of 0.72.
About South32
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.
Forward-looking statements
This release contains forward-looking statements, including
statements about currency exchange rates, commodity prices,
production forecasts, plans, exploration and capital expenditure.
These forward-looking statements reflect expectations at the date
of this release; however, they are not guarantees or predictions of
future performance. They involve known and unknown risks,
uncertainties and other factors, many of which are beyond our
control, and which may cause actual results to differ materially
from those expressed in the statements contained in this release.
Readers are cautioned not to put undue reliance on forward-looking
statements. Except as required by applicable laws or regulations,
South32 Limited does not undertake to publicly update or review any
forward looking statements, whether as a result of new information
or future events. Past performance cannot be relied on as a guide
to future performance.
Further information
INVESTOR RELATIONS
Alex Volante Rob Ward
T +61 8 9324 9029 T +61 8 9324 9340
M +61 403 328 M +61 431 596
408 831
E Alex.Volante@south32.net E Robert.Ward@south32.net
MEDIA RELATIONS
Diana Wearing James Clothier
Smith T +61 8 9324
T +61 8 9324 9198 9697
M +61 436 482 M +61 413 319
290 031
E Diana.Smith@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
16 December 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCTFBFTMBABMJF
(END) Dow Jones Newswires
December 16, 2016 02:00 ET (07:00 GMT)
South32 (LSE:S32)
Historical Stock Chart
From Apr 2024 to May 2024
South32 (LSE:S32)
Historical Stock Chart
From May 2023 to May 2024