South32 is deepening investments into its manganese production in South Africa. Picture: Supplied
Diversified resource company South32 has reported a notable 12% increase in manganese production and sales from South Africa during the quarter ending September 2024, elevating output to 597 000 tons.
This increase, amounting to an additional 63 000 tons, aligns with the company’s ongoing commitment to optimising its product mix and maximising margins through the sale of secondary products.
South32 is deepening investments into its manganese production in South Africa. Last month, South32’s received a boost to advance its Arizona-based Hermosa project towards manganese production after landing a $166 million (R2.9 billion) funding grant from the US government.
During the quarter to end September, South32 recorded strong mining performance and had to sell “secondary products to maximise” margins, boosting output for the quarter by 12% or 63 000 tons to 597 000 tons.
As a result, South32 has maintained its full-year production guidance of 2 million wet metric tonnes for the fiscal year 2025, signalling a stable outlook for its operations.
“The operation delivered strong mining performance and continued to sell secondary products to maximise margins. We will continue to optimise our product mix and use of higher cost trucking in response to market conditions, with FY25 production guidance remaining unchanged at 2,000kwmt,” said the company.
South32 has now scheduled a planned maintenance of its South Africa manganese operation in the June 2025 half year period.
In Australia, South32 continued “a substantial dewatering program” for its manganese operations. The Australian manganese operation however is on track to resume production in the quarter to December 2024.
Apart from manganese, South32 also raised quarterly aluminium production by 5% as its Hillside Aluminium operation “continued to test its maximum technical capacity” while low-carbon aluminium production from Brazil Aluminium and Mozal Aluminium increased by 12%.
In terms of copper, the company’s Sierra Gorda payable copper equivalent production firmed up by 20% due to higher planned copper grades and a significant increase in molybdenum recoveries as a result of improved ore quality.
“We have maintained annual production guidance for all of our operations with a strong start to the year in aluminium and a 20% uplift in copper equivalent volumes from Sierra Gorda,” said South32 CEO, Graham Kerr.
The company has just disposed of its Illawarra Metallurgical Coal operation, describing the transaction as “a major milestone” in its portfolio transformation. The disposal had also unlocked significant value and streamlined the company’s business toward commodities critical for a low-carbon future.
“The sale has also lowered our sustaining capital intensity and strengthened our financial position, enabling us to self fund our growth in base metals and deliver returns to shareholders via our on-market share buy-back,” added Kerr.
As at the end of the quarter under review, net debt in South32 decreased by $723m to $39m. Working capital increased by $150m, primarily related to a temporary increase in work in progress and finished goods inventories in our aluminium value chain.
South32 has provided funding of $63m to its manganese equity accounted investment (EAI) during the September 2024 quarter to support the operational recovery plan at Australia Manganese following the impacts of Tropical Cyclone Megan.
An additional $135m was invested in group capital expenditure. Shares in South32 fell by 2.05% in afternoon trade on the JSE to R42.99.
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