South32 has released its March quarterly report, detailing extensive plans and figures from its operations, including increased manganese and aluminium production estimates and significantly lower annual metallurgical coal production.
The miner outlined its annual and quarterly production changes. Manganese did particularly well, with year-over-year (YoY) ore and alloy production up 13 and 11 per cent, respectively, to 4.2Mt and 180,000t.
The company’s Australia Manganese and South Africa Manganese ore production rates were 7 per cent and 5 per cent higher.
Australia Manganese’s YoY ore production rise in the nine months to end-March 2018 of 14 per cent to 2.53Mt set a new company record, and as such, production guidance has increased for the year by 6 per cent. (South32 owns a 60 per cent stake in both companies.)
Another record was set at the Mozal aluminium smelter located 20km west of Mozambique, increasing payable nickel production at the Cerro Matoso project by 21 per cent to 32,500t.
Meanwhile, coal — particularly metallurgical coal figures from Illawarra, New South Wales — was down overall. Illawarra’s metallurgical coal production decreased YoY by 44 per cent; South32 blamed this primarily on the outage at Appin Colliery, which closed from June to August last year due to gas concerns.
Guidance for 2018 has been revised to 4.1Mt from the previous 4.5Mt. South32 predicts a return to historical rates by the second half of 2020.
Graham Kerr, chief executive officer of South32, highlighted the company’s strong results from Mozal and Australian Manganese, and offered reassurance regarding the drop in coal production.
“We delivered production records at Mozal Aluminium and Australia Manganese and have increased full year guidance for both of our manganese operations in light of strong market demand,” he said.
“At the Appin colliery we further prioritised coal clearance and ground rehabilitation activities during the quarter, setting the foundation for a return to historical rates of production at Illawarra Metallurgical Coal of more than 8Mt per annum.
“We also continued to benefit from elevated prices in our key commodity markets, strengthening our net cash balance by $US447 million ($578.5 million) to $US1.9 billion after allocating a further $US85 million to our on-market share buy-back.”