SA assets deliver for South32 as a cyclone hammers its Australian manganese operations

Graham Kerr, CEO, South32

South32’s South African aluminium and manganese operations both delivered record production levels during the March quarter which saw major damage done by a tropical cyclone to the group’s Australian manganese operations.

According to CEO Graham Kerr South African Manganese increased its saleable production by 8% to a record 1.641mt in the nine months to end-March “as the operation delivered improved mining performance and planned maintenance was deferred to June 2024 quarter. Financial year 2024 guidance remains unchanged at 2mt.”

Operations at Australia Manganese were temporarily suspended in March because of Tropical Cyclone Megan which caused extensive damage to the mine and port infrastructure.

Kerr said that “the operational recovery has focused on re-establishing critical services and dewatering targeted mining pits. We expect to re-commence wharf operations and exports sales in the third quarter of financial year 2025.

“Alternative shipping options are being evaluated to mitigate the impact of the wharf outage. These options may establish partial ore export capability in advance of the wharf restoration.

“Australia Manganese maintains property damage and business interruption insurance. We are working with our insurers to assess the impact of Tropical Cyclone Megan and expected insurance recoveries.”

Turning to the Hillside Aluminium smelter Kerr said saleable production increased by 1,000t to an equal record of 540,000t in the nine months ended March “as the smelter continued to test its maximum technical capacity despite the impact of load-shedding.  Financial year 2024 guidance remains unchanged at 720,000t.”

Kerr said South32 has now “achieved significant milestones aligned with our strategy to transform our portfolio toward commodities critical to the transition to a low-carbon future.”

Amongst these was the sale of Illwara Metallurgical Coal for up to US$1.65bn which Kerr said would “realise significant value, further streamline our portfolio and unlock capital to invest in our high-quality base metals projects.”

Chief amongst these was the approval of development of the Taylor zinc-lead-silver deposit at the Hermosa project near Tucson, Arizona which Kerr said is “expected to deliver attractive returns over multiple decades and unlock further value as the first phase of our regional scale opportunity.”

Kerr added that “with the exception of Australia Manganese our financial year 2024 production and operating unit cost guidance is unchanged, placing us in a strong position to capitalise on strengthening market conditions for many of our key commodities.”