South32 shares fall after it warns it will miss production targets
South32’s share price fell 5.4% to R26.65 on Wednesday morning after the mining group warned shareholders it would miss production targets by more than 10% at its Illawarra metallurgical coal mine.
The mining group, unbundled from BHP Billiton in 2015, said it would miss its target because of a safety closure. The company safely evacuated all personnel from its undergound mine in New South Wales, Australia, after detecting dangerous levels of gas.
The government regulator has issued a prohibition notice suspending production in the affected areas until an investigation has been completed.
South32 said a revised production forecast for its financial year to end-June would be provided in due course, with the decrease expected to translate directly into sales given the low inventory levels. A commensurate increase in unit costs was also expected.
The group warned shareholders that production from Illawarra would be at least 10% lower than its 7.9-million tonne target.