Three planned longwall moves were completed during the period.

A 35% increase in metallurgical coal production in the March 2016 quarter was underpinned by the recommencement of longwall mining at Dendrobium and the ramp-up of the new Appin Area 9 longwall following project completion ahead of schedule and below budget.

The final cost of the Appin Area 9 project is expected to be $US565 million, representing a 33% saving on the original budget.

The West Cliff colliery has now been closed.

Illawarra Coal’s FY16 coal production is expected to be 8.25Mt (metallurgical coal 6.9Mt, energy coal 1.35Mt).

Restructuring at Illawarra Metallurgical Coal is expected to be completed in the June 2016 quarter.

South32 CEO Graham Kerr said: “We continue to strengthen our balance sheet by focussing on value, not volume.

“We are making great progress on our cost-out program across all operations and have continued to generate cash despite volatile commodity markets.

“We have successfully completed the Appin Area 9 project at Illawarra Metallurgical Coal…[This] will be delivered below budget.”