Worsley set for big production lift

South32 expects to reach nameplate capacity at its Worsley Alumina operation this financial year, and has revealed its coking coal production rose sharply from the year prior.

Today, South32 released its June quarterly results, which detailed a one per cent rise in production at Worsley for the 2019 financial year to 3.8 million tonnes.

The company said alumina production was up 12 per cent in the June 2019 quarter and was expected to approach nameplate capacity of 4.6 million tonnes in the 2020 fiscal year.

“(This is set to occur) as we further benefit from initiatives that are expected to sustainably improve calciner availability and the refinery processes excess hydrate stocks,” it said.

The expected increase in output marks a big improvement, as output has been stuck at between 3.8mt and 3.9mt over the past six years.

South32 has previously achieved nameplate capacity at Worsley at various times but only for brief periods.

In regard to the FY19 results at Worsley, the company said lower than budgeted volumes, additional maintenance and higher caustic soda consumption were expected to result in a modest increase in operating unit costs from its prior guidance.

The company also reported a 69 per cent surge in full-year coking coal production, as it ramped up production at its Illawarra project.

Coking coal output from Illawarra rose to 5.4 million tonnes from 3.2 million tonnes for the financial year, while UBS had previously estimated annual output of 5.3 million tonnes.

The company also said it had received bids for its South Africa Energy Coal division in the June quarter and was currently in negotiations with the interested parties.

Shares in South32 were flat at $3.03 each at 12.15pm AEST.