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UPDATE 1-Australia's South32 Q4 coking coal output slumps on outage at main mine
July 20, 2017 / 1:19 AM / 5 months ago

UPDATE 1-Australia's South32 Q4 coking coal output slumps on outage at main mine

* South32 coking coal slumps

* Main mine still shut

* Eyes more buybacks, acquisitions (Adds CEO quotes, share price, details on buyback)

July 20 (Reuters) - Australian miner South32 Ltd said on Thursday its fourth-quarter coking coal production slumped 32 percent from a year ago following an extended outage at its main Appin mine over concerns about gas leaks.

South32, made up of non-core assets spun off by mining giant BHP in 2015, also missed its guidance on several other commodites due to bad weather and challenging conditions, and said it would continue to buy back its shares.

In coking coal, production fell to 1.4 million tonnes in the June quarter from 2.1 million tonnes a year earlier, the company said in a statement.

“Production at the Illawarra metallurgical coal Appin colliery remains suspended as a comprehensive review of the operation’s systems and processes is undertaken,” Chief Executive Graham Kerr said.

Challenging ground conditions and high gas levels have disrupted operations at the mine on numerous occasions since mid-2016. South32 said it will give revised production guidance when it reports its fiscal 2017 earnings next month.

Shares of the company fell as much as 2.5 percent in early trade on Thursday against a firmer broader market.

South32 reported a modest two percent lift in full-year aluminium production and a five percent gain in manganese ore production, but output for all other commodities declined year-on-year.

“While we didn’t achieve the level of consistency that we expect from our broader portfolio, our alumina, nickel and manganese operations finished the year on a strong note,” Kerr said.

As of June 30 the company said it had bought back $211 million of its shares at an average price of A$2.66 as part of a promise made in late March to return an additional $500 million to shareholders.

It also said it remained on the lookout for “high quality” acquisitions after purchasing a 15 percent interest in zinc, lead and silver explorer Arizona Mining for $81 million during the quarter. (Reporting By Shashwat Pradhan in Bengaluru; Editing by James Regan and Richard Pullin)

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