South32 drives up Australia Manganese ore output

Groote Eylandt Mining Company operation (GEMCO) in the Gulf of Carpentaria, Queensland. Image: South32

South32 has delivered record production at the Australia Manganese operation in the 2020 financial year, pushing it to above average sales in the June quarter.

Its production of saleable ore increased by 20 per cent in the June quarter due to a ramp up in shipments that were previously stalled by COVID-19.

The company produced 854,000 wet metric tonnes of Australia Manganese ore in the June quarter and sold 928,000 wet metric tonnes.

South32 took advantage of favourable market conditions to ramp up its June quarter sales, and was selling its Australia Manganese product at an average 7 per cent discount to the high-grade, 44 per cent manganese lump ore index in the 2020 financial year.

Overall Australia Manganese ore production for the 2020 financial year was up by 4 per cent, from 3.35 million to 3.47 million wet metric tonnes, while its ore sales remained the same.

South32 has a 60 per cent interest in its Australia Manganese operations, which include the Groote Eylandt Mining Company operation (GEMCO) in the Gulf of Carpentaria, Queensland and Tasmanian Electro Metallurgical Company (TEMCO) operation in Tasmania.

However, both South32’s Australia Manganese alloy production and sales took a nosedive, dropping by 29 per cent and 23 per cent in the 2020 financial year, respectively, due to one of the company’s furnaces at TEMCO remaining offline.

South32 chief executive Graham Kerr said the company had seen strong demand during COVID-19’s ongoing global impact.

“Despite the health crisis, we delivered a strong operating result, highlighted by annual production records at Brazil Alumina, Hillside Aluminium and Australia Manganese ore,” he said.

“We have continued to see good demand for our products, with sales exceeding production at the majority of our operations.

“With uncertainty remaining in global markets we continue to manage our financial position to ensure we retain the right balance of flexibility, efficiency and prudence.

“Looking forward we remain focussed on reducing controllable costs, managing counterparty and supply chain risk and optimising working capital to ensure the business remains resilient during a potentially extended period of volatility and lower commodity prices.”

South32 also noted that its Cannington silver and lead mine in Queensland exceeded its 2020 financial year guidance by 8 per cent.

South32 also returned to a three long wall configuration at Illwarra Metallurgical Coal in New South Wales in late April as the company aims to enhance its long-term value.

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