The coal measures of the NSW South Coast region are gaseous (full of methane) and difficult to work at times, as well as being deep underground which makes for high costs – and high risks.
But they are also rich, high quality hard coking coal very suitable for steel making, and for that reason they have always been in high demand at Port Kembla and in export markets.
There have been a number of disasters in the region over the past 100 or more years. Eighty one people died in an explosion in 1887, a further 95 died in a disaster in 1902 and the most recent was in the Appin mine in 1979 which saw 14 men lose their lives.
Yesterday South32 (S32) gave a reminder of those risks, especially at Appin when the company told the ASX that gas problems in the mine had forced a halt to production.
South 32 shares fell 2.5% to $2.66 yesterday
Production at Appin Area 7 and Area 9 has been suspended pending an investigation following elevated gas concentrations at Area 7 on May 7, the company told the ASX yesterday.
The NSW Department of Planning and Environment has been notified, with a prohibition notice issued.
South32 said as a result, it will miss an annual target for coal production from the mine and for the company as a whole. The company said it will provide revised production guidance for the Illawarra operations at a later date. Mining has been suspended indefinitely.
South32 said it now expects output at its Illawarra Metallurgical Coal unit to be at least 10% below previous guidance of 7.9 million tonnes of coal in the year to June 30.
The company said elevated gas concentrations were recorded at Area 7 of its Appin mine on May 7.
It’s not the first time high gas readings have been recorded at the mine.
Last October operations were suspended in the Area 9 of its Appin mine after a gas build-up worsened ground conditions. Another part of the mine was also found to have high methane levels in the same month.
“Production at the Area 7 and Area 9 longwalls (huge effecient coal mining equipment), which form part of the broader Illawarra Metallurgical Coal operation, has been suspended until our investigation into the incident is completed,” South32 said yesterday.
