South32: Cannington hauls itself above expectations

South32’s Cannington silver-lead mine in North West Queensland has had a successful second half of 2021 as the company prepares to transition to 100 per cent truck haulage at the site.

Cannington remains on track to transition to a 100 per cent truck haulage operation from the June 2022 quarter as a low-cost capital option that has the potential to bring forward further higher-grade material from the 2023 financial year at current operating costs and throughput rates.

A trial of light battery electric vehicles is also expected to commence during the June 2022 half-year, testing their potential use in the vehicle fleet.

Cannington has recorded a 9 per cent increase of payable zinc equivalent production in the December 2021 half year.

The increase brought the production to 152,500 tonnes for the half as higher grades across all products and strong underground performance supported metal production.

Payable zinc sales increased by 29 per cent during the quarter as South32 drew down inventory at Cannington, while payable lead and silver sales increased by 50 per cent and 47 per cent respectively due to the timing of shipments, following adverse weather in the September 2021 quarter.

“We achieved a number of strong production results across our portfolio and realised significantly higher commodity prices in the December 2021 half-year, lifting operating margins across the group,” South32 chief executive officer Graham Kerr said.

Production guidance for the 2022 financial year has been revised to be 5 per cent higher than previously expected, to reflect continued strong underground mine performance and higher average grades, making the updated targets 12.28 million ounces for silver, 117,900 tonnes for lead, and 292,200 tonnes of payable zinc equivalent production.

In New South Wales, the South32 Illawarra metallurgical coal operation saw a saleable production decrease of 23 per cent following an extended longwall move at the Dendrobium coal mine.

Over to the west at Worsley Alumina in Western Australia, saleable production decreased slightly by 2 per cent.

However, the production guidance for the 2022 financial year remains unchanged with the ongoing focus of improving initiatives at the refinery expected to maintain production above nameplate capacity of 4.6 million tonnes.

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