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 at the release of the September quarter results: “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.”

South32 said it would release its December half results on February 25.

Illawarra Metallurgical Coal, which now sits in BHP Billiton spin-off South32, has achieved production records in the September quarter and the company’s guidance for the FY2016 remains unchanged.

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.