Despite failing to meet production targets at its Illawarra Metallurgical Coal operations, record coal prices saw revenues increase by over 200 per cent.
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In its June 2022 quarterly results, South32 saw a slight drop in the production of metallurgical coal, with 1380 kilotonnes of coal produced in the fourth quarter of 2022.
This figure was a 12 per cent drop on production totals in the third quarter, when 1565 kilotonnes were mined.
In its third quarter results, South32 predicted production in its Illawarra Metallurgical Coal division to produce 1600 kilotonnes.
The final results show that the total metallurgical coal production in the 2022 financial year reached 5712 kilotonnes, below the estimate of 5900 kilotonnes.
"Illawarra Metallurgical Coal saleable production decreased by 15 per cent (or 1,136kt) to 6,509kt in FY22 as we completed three longwall moves across Appin and Dendrobium during the year," South32 said in its results.
South32 CEO Graham Kerr ascribed the difference between expected and actual production totals to the impact of ongoing wet weather in the Illawarra in 2022 and difficulties ensuring enough workers were on site due to staff having to stay home sick or isolate due to COVID-19.
"Our teams delivered another strong operating performance in the June quarter, despite challenges that included extreme weather, supply chain disruptions and reduced labour availability caused by the COVID-19 pandemic," Mr Kerr said.
Despite these impacts on production, soaring coal prices propped up the Illawarra Metallurgical Coal division. Prices for metallurgical coal rose by 231 per cent on previous year's figures, while energy coal went even further, rising by 290 per cent.
Realised prices were also higher in the second half of the 2022 financial year, with metallurgical coal up 51 per cent and energy coal up 85 per cent.
"Notwithstanding these disruptions and the volatility witnessed across seaborne coal markets, our geographically diverse customer base supported a 29 per cent increase in sales volumes in the quarter as we drew down inventory, capturing the benefit of very strong index prices," South32 said.
Across the business as a whole, South32 continued to pursue its move towards minerals in demand for low carbon industries, with acquisitions of a greater share in a hydro-powered aluminium smelter in Mozambique and a share in a bauxite mine in Brazil.
The company is still looking for buyers for its Eagle Downs metallurgical mine in Queensland which is in care and maintenance.
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