With the mining boom in place, mining giants like South32 Limited [ASX:S32] were destined to profit for a long period of time.
And yet, today its share price has dropped to just $3.74. That’s a decline of 4.10%.
Sure, it’s not a drastic decrease, but any decrease from a mining company in the midst of a mining boom is generally not good news.
In fact, South32 are currently one of the weakest performers in its sector.
So, what happened?
The continued closure of Appin coalmine
Mining productivity has been severely impacted due to a New South Wales Appin mine currently experiencing a safety issue.
This seems to be happening too often at Appin.
Back in 2017 after a routine safety review of the mine, there were concerns regarding a build-up of methane gas, forcing the mine to close until this issue was resolved.
It reopened in October last year.
And all seemed to be going as normal.
But then another incident occurred just last month.
On a Sunday afternoon, an underground coalmine burst. An occurrence that can potentially cause serious danger to those in the mine at the time.
Luckily, no one was injured, with the only damage coming in the form of dust on the mining uniforms.
Nevertheless — and understandably — a probation notice was issued soon after, halting all mining operations in the vicinity of the incident.
Illawarra Mercury News reported that a South32 representative stated:
‘As is standard practice, we notified the NSW Department of Planning and Environment, we are working with the Regulator to investigate the incident. which subsequently issued a Prohibition Notice for the impacted area, nobody was injured and longwall and other unaffected development operations at Appin mine are continuing.’
Thus, once again, South32 are facing health and safety problems with the Appin coalmine.
Its history will not bode well with reviewers, as the mine is notorious for breaching health and safety standards.
Thankfully, with the mining boom still in place, South32 could potentially profit from other projects.
The Appin mine, however, will not be one of them.
For Money Morning