JSE-listed South32’s manganese production swung up by 8% in South Africa in the nine month period ended 31 March as the company delivered improved mining performance despite port, rail and electricity constraints afflicting the country’s economic productivity.
The stronger SA manganese production covered up for low output in Australia where operations were impacted by Cyclone Megan.
South32 yesterday said it was now working on “recovery plans to enable safe return to operations” and exports of ore.
Saleable production from the South Africa manganese operations of South32 grew by 119 000 wet metric tons to a new high of 1.6 million wet metric tons over the nine months to the end of March.
The company said this had been attributed to the South African operation delivering “improved mining performance” while “planned maintenance was deferred to the June 2024 quarter”.
South32 is, however, maintaining its full year 2024 manganese production from South Africa at 2m wet metric tons.
In the quarter to end March, the company raised sales of manganese from South Africa by 14% “due to the timing” of shipments.
The year to date realised price for manganese ore sales from South Africa yielded a premium of approximately 6% to the medium grade 37% manganese lump ore.
South32 CEO Graham Kerr said this was after the group strengthened volumes of premium material from its Wessels mine in South Africa.
“This quarter, we delivered improved operating results, highlighted by record year to date production at Hillside Aluminium and South Africa Manganese and a 60% uplift in quarterly volumes at Illawarra Metallurgical Coal,” Kerr said.
“Operations at Australia Manganese remain temporarily suspended following tropical cyclone Megan, while we progress recovery plans to enable a safe return to operations.”
The company raised its aluminium production for the year in the period to end March by a minimal 1% as the Hillside operation achieved higher production, while the Brazil operation “continued to ramp up” toward nameplate capacity.
Production from Alumina, however, sagged by a marginal 1% on a year to date basis as the company completed planned maintenance works at Worsley Alumina.
Sierra Gorda’s payable copper equivalent production also dipped by 13% over the same period as higher throughput was offset by lower planned copper grades and lower molybdenum recoveries in the current phase of the mine’s plan.
There was also a 5% decline in nickel production from the Cerro Matoso mine although output from the operation is up by 8% in the quarter to March 2023.
“We approved development of the Taylor zinc-lead-silver deposit at our Hermosa project, which is expected to deliver attractive returns over multiple decades and unlock further value as the first phase of our regional scale opportunity,” Kerr said.
“We also announced our decision to sell Illawarra Metallurgical Coal for up to $1.65 billion, which will realise significant value, further streamline our portfolio and unlock capital to invest in our high-quality base metals projects.”
As at the end of March, South32’s net debt decreased by $154 million (R2.9 billion) to $937m, with the company benefiting from improved operating performance and a partial unwind in working capital.
It invested $510m in safe and reliable, and improvement and life extension as well as capital expenditure over the nine month period to the end of March.
However, the value of South32’s investments during the March quarter was lower by as much as 31% on the back of “capital efficiencies and deferred certain non-critical” projects.
BUSINESS REPORT