July 25 (Reuters) - Australian diversified miner South32 Ltd on Monday posted a 3% rise in fourth-quarter metallurgical output as a return to longwall method of mining at its flagship Illawarra project in New South Wales continues to boost output.

Production of metallurgical coal, used to make steel, rose to 1.38 million tonnes (Mt) in the three months to June 30, from 1.34 Mt a year ago, but missing a UBS estimate of 1.57 Mt.

(Reporting by Upasana Singh and Sameer Manekar in Bengaluru; Editing by Daniel Wallis)