South32 metallurgical coal output up 18%

South32 has posted a near 18 per cent rise in third-quarter metallurgical coal output and says it has received approval to restart its South African coal operations during a coronavirus-related lockdown, although at a reduced rate.

Production of the steel-making ingredient rose to 1.2 million tonnes during the quarter ended March 31, meeting a UBS forecast, and was higher than the 990,000 tonnes of output a year earlier.

South32 said on Monday it had received government approval to restart limited activity at its South African energy coal operations during the lockdown period, albeit at a reduced pace.

The unit had been in care and maintenance mode since the government announced a lockdown in late March.

“We have acted to protect our strong financial position,” chief executive Graham Kerr said, referring to a range of measures the company has taken, including suspension of buybacks, slashing capital spending and a separate review expected to control costs from fiscal 2021.

While a majority of South32’s operations have escaped relatively unscathed from the outbreak, the Australian miner withdrew 2020 guidance for its Colombian and South African operations in March owing to coronavirus-related restrictions.

The company on Monday maintained 2020 production guidance for all other operations, with the exception of Australian manganese output which is expected to be about 5.0 per cent lower due to similar restrictions.

South32’s shares last traded at $2.06 on the ASX and is about 25 per cent down since the start of 2020.

Be the first to comment

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.