South 32 exceeds production guidance with significant increases in copper and aluminium

South32, the diversified mining and metals group, exceeded annual production guidance following a 20% increase in copper production and a 6% rise in aluminium.

The announcement in an operations update saw the group become one of the top gainers on the JSE early Monday morning, with the share price gaining 7.25% to R35.37.

The group warned again it is reviewing its production guidance for 2026 because it is, after six years, still in negotiations with Eskom and Mozambique authorities about a new electricity tariff agreement for its Mozal aluminium smelter in Mozambique. On Monday, the group said it was assessing the extent of  animpairment to be written down on the smelter, due to the uncertainty.

"Australia Manganese successfully resumed export shipments in the quarter, marking a significant recovery from the impacts caused by Tropical Cyclone Megan. We continued to streamline our portfolio toward higher-returning businesses, completing the sale of Illawarra Metallurgical Coal in the first half and agreeing to divest Cerro Matoso in July,” CEO Graham Kerr said.

Mozal Aluminium saleable production increased 13% to 355kt in the 2025 financial year, as the smelter completed its operational recovery plan and operated near nameplate capacity in the June quarter, having successfully managed the impacts of civil unrest in Mozambique.

Sales increased 46% in the quarter as better product availability supported a planned drawdown of inventory.

Meanwhile, at Hillside Aluminium in Richards Bay, saleable production was largely unchanged at 718kt in the year, as the smelter tested its maximum technical capacity, despite the impact of load-shedding. Its production guidance for 2026 was unchanged at 720kt. Sales increased 13% in the June 2025 quarter.

Over the past financial year, $517 million was invested in the Hermosa project to grow base metals production. “This quarter, we achieved key milestones at Hermosa's Taylor zinc-lead-silver project, starting the main shaft sink and construction activities for the process plant,” said Kerr

"With operating momentum, an upgraded portfolio, and a strong balance sheet, we are well positioned to deliver growth and returns," he said.

By the end of the year, the group had reached 102% of its production guidance, while group sales volumes increased 21% in the quarter, supporting a working capital unwind of $225m in the second half. Operating unit costs were in line with guidance.

Aluminium production increased 6%, as Brazil Aluminium continued to ramp up. Alumina production was in line with guidance. Worsley Alumina started mining new bauxite areas under the Worsley Mine Development Project.

Sierra Gorda payable copper equivalent production increased 20%, exceeding guidance by 4%. Some $54m was received in distributions from Sierra Gorda in the quarter, bringing total returns for South32’s share to $176m for the year.

Cannington achieved revised 2025 production guidance, supported by improved mining rates in the quarter. The underground mine plan was being reviewed due to underground complexity.

Manganese production exceeded production guidance by 9%, as Australian Manganese completed its operational recovery plan and South Africa Manganese had a strong finish to the year.

The group returned $350m to shareholders via dividends and on-market share buy-backs.

In the June quarter, net funding of $110m was provided to support the operational recovery plan at Australia Manganese. Australia Manganese received $350m from insurance payments, following the impacts of Tropical Cyclone Megan. Further insurance recoveries were being sought.

At Taylor, the sinking of the main shaft commenced, while the sinking of the ventilation shaft continued. Construction activities for the process plant also commenced during the June 2025 quarter.

Visit:www.businessreport.co.za