South32 beats coal forecast

DIVERSIFIED miner South32 has beaten its metallurgical coal output forecast for the past year, boosted by betterthan-expected production at a key mine.

It comes despite a slump in production of the coal, which is used in steel production, during the three months to June.

The group’s output of metallurgical — or coking — coal fell 24 per cent to 1.1 million tonnes in the June quarter, from 1.4 million tonnes a year earlier, the company said in a statement yesterday.

Production was nonetheless ahead of the 818,000 tonnes forecasts by analysts at investment bank UBS.

The Appin colliery in New South Wales’ Illawarra region was affected by an extended outage in the first half of the financial year, cutting full-year saleable production by 40 per cent.

However South32, made up of non-core assets spun off by mining titan BHP Billiton in 2015, posted full-year coking coal output of 3.2 million tonnes.

The miner had forecast fullyear coking coal production of 3 million tonnes.

South32 added that it expected to record one-off charges of about $60 million in its full-year results on account of a reorganisation.

The miner is scheduled to report its annual results on August 23.

South32, the world’s No. 1 manganese producer, posted a 2.1 rise in quarterly manganese ore production, while full-year manganese output rose 10 per cent amid stronger demand and pricing.

In April, South32 bid $US1.3 billion to take full control of Arizona Mining, offering a hefty premium for the Toronto-listed company that is developing zinc, lead, manganese and silver assets.

Shares in South32 closed up 7 ,¢at $3.65.