BHP Billiton’s export orientated operations NSW Energy Coal also reported production volumes higher than all comparable periods with annual and quarterly production records achieved.

Illawarra’s record annual production of 7.9 million tonnes followed the successful commissioning of the $160 million West Cliff Coal Preparation Plant upgrade project in March. Illawarra Coal’s June quarter production was 2.3Mt versus 1.6Mt for the corresponding 2011 quarter.

In June BHP Billiton approved an investment of $845 million to sustain operations at Illawarra Coal by establishing a replacement mining area west of its Appin mine.

The replacement area – Appin area 9 – would have a production capacity of 3.5Mtpa of metallurgical coal and would sustain Illawarra Coal’s production capacity at 9Mtpa.

A longwall move at the Appin mine is expected to have only a minor impact on production in the September 2012 quarter.

Overall production for BHP Billiton’s metallurgical coal division rose by 2% to 8.1Mt for the June quarter.

“A modest increase in metallurgical coal production was achieved in the 2012 financial year despite numerous operating challenges,” the company said.

Queensland Coal production remained constrained during the June 2012 quarter largely as a result of industrial action, the company said.

“This disruption to production and sales has led to significant margin compression for our leading Queensland Coal business,” it said.

BHP Billiton announced the indefinite closure of its Norwich Park mine in Queensland during the June 2012 quarter following a review of the mine’s profitability.

In July 2012, force majeure was lifted across all BHP Billiton Mitsubishi Alliance sites. BMA and the unions have also reached a framework agreement that should guide the finalisation of the BMA Enterprise Agreement. Further work is underway to finalise local mine site details, the company said.

June quarter energy coal production was up by 1% to 18.4Mt.