Underlying earnings for the 12 months to June 30 fell to $1.46 billion from $1.97 billion the previous year, as the impact of falling aluminium and coal prices was too much to be offset by cost cuts, the mining company said on Thursday morning.

Some analysts had predicted a profit of $1.04 billion.

But chief executive Graham Kerr was bullish about the Illawarra Metallurgical Coal operations. In a conference call with analysts and journalists he pointed to a 57 per cent increase in production volume as the Appin mine continued to "ramp up" towards earlier production levels.

He predicted this would continue as Appin returned to the three-longwall configuration it used previously.

But the news has not been as good for the global miner's thermal coal operations, with the South African Energy Coal responsible for a write-down in excess of $800 million.

"In November 2017, we announced our intention to manage South Africa Energy Coal as a stand-alone business. Our vision was that it become sustainable, black-owned and operated, consistent with South Africa's transformation agenda," Mr Kerr said.

South32 was now in exclusive negotiations with Seriti Resources to buy business. Seen alongside last year's purchase of a 50 per cent stake in the Eagle Downs metallurgical coal project in Queensland, it's a movement away from brown coal.

The South Africa Energy Coal business cost South32 $851.8 million in impairment charges and reduced the group's profit after tax by 71 per cent in the 2019 financial year.