Cashed-up Illawarra Coal parent South32 is on the lookout for more acquisitions following its deal to buy Helensburgh’s Metropolitan Colliery, CEO Graham Kerr told investors.
Addressing the company’s annual general meeting in Perth, Mr Kerr said the miner’s performance last financial year was strong, after a series of restructuring moves aimed at “optimising our operations” generated more than $515 million in savings.
“We stayed true to our strategy, to optimise our operations, unlock their potential by converting our high quality resources into reserves, and identify and pursue investment opportunities beyond our current portfolio,” Mr Kerr said at last Thursday’s AGM.
Mr Kerr said his company had achieved a lot in the 12 months since it was spun off from BHP Biliton, and in a challenging market for coal.
The deal to buy Metropolitan from Peabody Energy was announced in early November, after a round of cost-cutting and the merger of the Appin and West Cliff coal operations.
Restructuring returned cost savings of $515 million, enabling the $200 million Metropolitan purchase to be drawn from available cash.
The contract mine workers protesting in Appin today over pay deals from contractor Mastermyne will argue this bounty should be being shared with them.
Mr Kerr said South32 would be on the lookout for more acquisitions.
“Metropolitan is adjacent to our Illawarra operation in New South Wales, so it is a natural fit for our portfolio, and will enable us to unlock unique blending and resource synergies, whilst adding up to two million tonnes per annum of metallurgical coal to our portfolio,” he said.
“Consistent with our strategy, we will continue to identify and evaluate new and exciting opportunities outside our current portfolio, where we see value.”
He commended the $755 million Appin Area 9 project, delivered three months ahead of schedule and 33 per cent below budget.
We stayed true to our strategy, to optimise our operations, unlock their potential by converting our high quality resources into reserves.Graham Kerr, South32 CEO