South32 investments in copper and low-C aluminium delivered strong growth
South32 has reported in its quarterly report, ending December 2022, that group copper equivalent production increased by 12% in H1 FY23, as its recent investments in copper and low-carbon aluminium capacity delivered strong growth.
H1 FY23 Operating unit costs expected to be in-line or below FY23 guidance at the majority of its operations.
The company is well positioned to capture the benefit of improved market conditions, with further expected production growth in H2 FY23 and its ongoing focus on cost management to mitigate inflationary pressures
Worsley Alumina and Brazil Alumina operated above nameplate capacity in the December 2022 quarter, delivering an 8% increase in quarterly alumina volumes.
Aluminium production increased by 15% in the December 2022 half year, with a 50% uplift in low-carbon aluminium, following its acquisition of an additional shareholding in Mozal Aluminium and restart of the Brazil Aluminium smelter.
Sierra Gorda realised sequentially higher copper grades, delivering 45kt of payable copper equivalent production in the December 2022 half year.
Cerro Matoso commissioned the Ore Sorting and Mechanical Ore Concentration project in the December 2022 quarter, underpinning a 15 year extension to the mining contract, and supporting higher expected nickel production in H2 FY23.
Australia Manganese achieved record half year production, supporting a 7% increase in total manganese production.
Illawarra Metallurgical Coal delivered a 17% increase in quarterly metallurgical coal production, with improved volumes and labour productivity as we finalised a new industrial agreement at Appin.
FY23 production guidance at Cannington revised lower by 11% due to lower mill throughput and labour availability impacting mining rates, and at Brazil Aluminium by 25kt (or 25%) due to a slower ramp-up to nameplate capacity.
Work completed on Hermosa’s Clark selection phase pre-feasibility study confirmed the opportunity to produce high-purity manganese sulphate monohydrate for the growing North American electric vehicle supply chain.
South32 Chief Executive Officer, Graham Kerr: “Group copper equivalent production increased by 12 per cent in the December half year, as we benefitted from transactions that have repositioned our portfolio toward metals critical for a low-carbon future. Australia Manganese also achieved record half year production, while Cerro Matoso successfully commissioned the Ore Sorting and Mechanical Ore Concentration project, underpinning a 15 year extension to the mining contract.
“Despite industry wide inflationary pressures, we expect Operating unit costs for the first half to be in-line with or below guidance for the 2023 financial year at the majority of our operations. We remain focused on delivering safe and stable operational performance, and efficiencies to mitigate cost pressures and capture higher margins as markets improve.
“Looking forward, our capital management framework and disciplined approach to capital allocation is designed to reward shareholders as we grow our production and realise the benefits of improving market conditions.
At the same time, we continue to reshape our portfolio toward metals critical for a low-carbon future, advancing construction work, studies and exploration at our high-quality development options.”
