16th Jan 2020 08:02
(Alliance News) - Miner South 32 Ltd on Thursday reported a "strong" start to its financial year, but did caution on conditions in the coal sector.
For the first half ended December, South32's alumina production rose 4% year-on-year to 2.6 million tonnes, with Brazilian operations delivering a record performance. Aluminium production was flat at 496,000 tonnes.
Nickel production fell 2% to 20,600 tonnes, silver rose 2% to 6.1 million ounces, lead rose 14% to 55,300 tonnes, and zinc climbed by 24% to 32,500 tonnes. Manganese ore production fell 3% to 2.9 million wet metric tonnes, and manganese alloy put was down 17% to 91,000 tonnes.
However, energy coal production was 2% lower at 12.6 million tonnes and metallurgical coal output declined by 7% to 2.9 million tonnes.
South32 said market conditions for coal have been weak, meaning it has lessened activity in South Africa. Guidance for all commodities in its year ending June has been held save for energy coal, where South32 now sees output towards the bottom end of the guided range.
These coal assets in South Africa are currently under sale, with South32 having agreed the ZAR100 million disposal to Seriti Resources Holdings Pty Ltd as well as a local community trust and an employee trust.
"We continued our strong start to the year, delivering record year to date production at Brazil alumina and maintaining production guidance across the majority of our operations," said Chief Executive Graham Kerr.
"We have acted decisively during the quarter in response to market conditions, reducing contractor activity at South Africa energy coal and higher cost trucking at our South Africa manganese business."
South32 said it is financially strong, with buybacks ongoing. Some USD331 million was returned to shareholders during the half.
South32 shares were 0.7% lower on Thursday morning in Johannesburg at a price of ZAR27.82 each.
By George Collard; [email protected]
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