A planned longwall move at the Appin mine led to lower production at Illawarra Coal during the September 2012 quarter.

The disruption is expected to continue with a longwall move at the nearby Dendrobium mine planned to begin at the end of the December 2012 quarter.

The moves are part of BHP Billiton’s $US845 million Appin Area 9 project strategy which it announced in the September quarter.

The company said the underground development was expected to sustain Illawarra Coal’s production capacity at 9 million tonnes per annum with first production anticipated in the 2016 calendar year.

Overall coking coal production for the quarter was 8.9Mt which is down 4% on the previous corresponding period, while production at Illawarra Coal was 1.9Mt compared to 2.2Mt for the same period last year.

The company’s central Queensland coking coal mines are being made more productive through better logistics management and supply chain improvements.

Queensland coal production increased by 20% during the September 2012 quarter as significant latent capacity was released across the supply chain, it said.

Production at the BHP Billiton Mitsubishi Alliance benefited from a reduction in industrial activity with no significant work stoppages experienced since July 2012.

A ballot on the BMA enterprise agreement will be conducted during October 2012.

During the September 2012 quarter, BMA announced it would cease production at its Gregory open cut mine following a review of the mine’s profitability.

During the September quarter BHP Billiton decided not to proceed with the 2.5Mtpa expansion of Peak Downs that is associated with the Caval Ridge mine development.

“Importantly, the 5.5 million tonnes per annum Caval Ridge mine remains on schedule to deliver first production in the 2014 calendar year while the valuable Peak Downs expansion option remains embedded within the portfolio,” the company said.

Production of thermal coal was higher than all comparable periods at 19.6Mt for the September quarter and reflected strong operating performance across the BHP Billiton Energy Coal portfolio.

NSW Energy Coal achieved record quarterly production following the completion of the RX1 project in the June 2012 quarter, ahead of schedule.