South32 expands metallurgical coal, manganese output

Image: South32

South32 has increased production of both metallurgical coal and manganese during the September quarter of this year.

Manganese ore production at Australia Manganese climbed 3 per cent from the previous quarter to 880,000 wet metric tonnes thanks to favourable ore characteristics.

A larger proportion of the company’s increase in manganese ore output was attributed to South Africa Manganese, which returned to full production following COVID-19 restrictions in the prior quarter.

Production at the Illawarra Metallurgical Coal operation in New South Wales also shot 22 per cent on the previous period to 1.86 million tonnes. South32 has returned to a three longwall configuration at the operation since April.

“Despite the health crisis, we have maintained annual production guidance at all operations,” South 32 chief executive Graham Kerr said.

“We delivered a 19 per cent increase in manganese ore production and a 22 per cent increase in metallurgical coal production.”

South32 is also on track to increase its alumina production to nameplate capacity in the current financial year.

Its hydrate circuit at Worsley Alumina in Western Australia is operating at a record rate of 4.65 million tonnes a year.

The company has maintained its 2021 production guidance at 3.965 million tonnes despite a 5 per cent decrease in saleable alumina production to 963,000 tonnes in the September quarter.

In light of COVID-19, South32 plans to save a further $US50 million ($70.5 million) and reduce its office footprint in Singapore and London.

The company is also progressing the sale of its stake in South Africa Energy Coal to Seriti Resources, and the TEMCO manganese alloy smelter in Tasmania.

South32 chief financial officer Katie Tovich, speaking at the Diggers and Dealers Mining Forum 2020 last week, said an exit from these businesses would significantly reduce the company’s capital intensity.

“(It) will allow us to bring a greater focus to our remaining portfolio, and improve group margins and return on invested capital,” Tovich said.

“We continue to reshape and improve our portfolio, with a focus on our upstream businesses, adding development options and forming greenfield exploration partnerships with a bias to base metals.”

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