January 16, 2018 / 10:53 PM / 3 years ago

UPDATE 1-South32 Q2 coking coal output falls 43 pct as mine outage weighs

(Adds background on mine outage, manganese forecast)

Jan 17 (Reuters) - Mining group South32 Ltd said on Wednesday its second-quarter metallurgical coal output dropped 43 percent due to an outage at its Appin mine in Australia, while raising its full-year output forecast for South African manganese operations.

Production of coal used in steelmaking fell to 788,000 tonnes in the December quarter from 1.39 million tonnes a year earlier, but was still up 60 percent on the previous quarter and beat a UBS forecast of 746,000 tonnes, following a partial restart of the Appin mine in August.

The Appin operations account for about 60 percent of overall production.

South32 suspended operations at Appin mid-2017 due to concerns over high gas levels in the mine. Government regulators allowed the company to partially restart the mine in August.

Since then, the mine has operated at a significantly lower efficiency compared with industry benchmark levels. In December, South32 forecast its Illawarra coal project’s 2018 output at about 60 percent of what it produced the previous year.

The company, which resumed operations at a section of the colliery in October, said it remained committed to its ramp-up plan as it looked to drive productivity to an “acceptable level”.

December quarter manganese ore output rose 21.8 percent from a year ago. Zinc production was down 62.3 percent over the period, while nickel output increased 12.2 percent.

South32 raised its full-year output forecast for its South African Manganese operations by 8 percent due to strong market demand and a record December quarter performance, but stood pat on guidance for all other operations. (Reporting by Chris Thomas in Bengaluru; Editing by Matthew Lewis)

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