Illawarra’s saleable coal production increased by 4% (or 96,000 tonnes) to a record 2.49Mt in the quarter as a broad-based improvement in productivity more than offset the impact of industrial action at Dendrobium, which has since been resolved.

FY2016 production guidance of 8.90Mt (metallurgical coal 7.20Mt, energy coal 1.70Mt) remains unchanged despite three longwall moves being scheduled for the remainder of FY16, including one in the December 2015 quarter and two in the second half of FY16.

The Appin Area 9 project is 90% complete and ahead of schedule with commissioning now expected to start in the third quarter of FY16.

The project, which sustains Illawarra Metallurgical Coal production capacity, is more than 20% below the original budget of $US845 million.

South32 CEO Graham Kerr said: “Our business is performing well and we are making excellent progress as we seek to optimise our operations, reduce costs and sustainably de-capitalise the business.

“Our high quality and low-cost assets, motivated workforce and strong balance sheet remain a key point of differentiation. Group net debt declined by $US206 million in the September quarter to $196 million.”

South Africa Energy Coal saleable production declined by 3% (or 216,000t) to 8.29Mt in the September 2015 quarter, reflecting the impact of planned maintenance and the sequencing of activity at the Wolvekrans Middelburg Complex.

Coal production in FY16 is expected to decline by 7% to 31.95Mt (16.65Mt exports, 15.30Mt domestic), as planned.