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South32 restarts limited production at Appin coal mine

South32 Ltd. restarted production at the Longwall 707 of its Appin coal mine in New South Wales, Australia, after completing a review of its Illawarra metallurgical coal operations.

The company said Oct. 13 that it plans to operate a single longwall at the Appin mine in line with prescribed ramp-up conditions.

South32 will continue to operate a single longwall throughout fiscal 2018, and return to a two-longwall operation in the December 2018 quarter.

Longwall 707 is expected to be completed during the June 2018 quarter, after which production will start at Longwall 902.

"Longwall utilization rates of 30% to 40% are significantly below industry benchmark levels and an opportunity exists for us to sustainably improve productivity in order to maximize the value of this high quality, long life resource," South32 CEO Graham Kerr said.

Kerr noted that the lower output in fiscal 2018 will impact unit operating costs and profitability.

Illawarra Metallurgical Coal produced 819,000 tonnes of coal during the September quarter, including 494,000 tonnes of metallurgical coal and 325,000 tonnes of energy coal. Meanwhile, a longwall move is scheduled for the Dendrobium mine in the March 2018 quarter.

South32 suspended production at the Appin Area 7 and Area 9 longwalls in May after elevated gas concentrations were recorded at Area 7.