South32 Limited Lowered FY17 guidance for Metallurgical Coal

Lowered FY17 guidance for Metallurgical Coal: South32 Limited (ASX: S32) had earlier announced that the production at Illawarra Metallurgical Coal in FY17 is expected to be at least 10.0% below prior guidance of 7.9Mt due to elevated gas concentrations at Appin Area. The company has informed the New South Wales Department of Planning and Environment (Resources Regulator) of the incident and a prohibition notice has been issued. Production at the Area 7 and Area 9 longwalls, which form part of the broader Illawarra Metallurgical Coal operation, has been suspended until the investigation into the incident is completed. For Q3FY17, the company reported a robust performance at aluminum smelters and achieved an alumina hydrate production rate of more than 4.6Mtpa at Worsley Alumina, while increasing ore production at South Africa Manganese to an annualized rate of 3.8Mwmt pa led by favorable market conditions. Further, it has delivered first ore from the higher grade La Esmeralda deposit at Cerro Matoso. Mining extraction at Cannington has been temporarily impacted by an underground fire that damaged the load-out and shaft haulage infrastructure, and extraction of the higher grade (silver/lead) stope 60L has been said to be delayed.   

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