22nd Oct 2015 06:47
LONDON (Alliance News) - South32 Ltd on Thursday reported increases in production across most of its commodities in the first quarter of the financial year, reiterating its full-year guidance, as it continues to reduce its costs and debt.
The miner, which was spun off from major BHP Billion PLC earlier this year, stuck to its production guidance for the financial year across all of its commodities, apart from its manganese operations in South Africa.
South32 said it reduced its net debt to USD196.0 million at the end of September, compared to USD402.0 million at the end of June and said it remains on track to reduce its controllable costs by USD350.0 million before the end of the 2018 financial year. In the current financial year, ending June 2016, South32 plans to reduce those costs by around 25% year-on-year.
Metallurgical coal production rose 5% quarter-on-quarter to 2.1 million tonnes in the first quarter to the end of September from 2.0 million tonnes. That was also up 13% from the 1.8 million tonnes produced a year earlier.
Thermal coal production, used to produce energy, fell 2% quarter-on-quarter to 8.7 million tonnes from 8.9 million tonnes, but this was up 2% from 8.5 million tonnes a year earlier.
Alumina production rose 8% quarter-on-quarter to 1.4 million tonnes from 1.3 million tonnes, which was a 10% year-on-year rise from 1.2 million tonnes. Aluminium production in the first quarter rose 1% from the previous quarter to 244,000 tonnes, but this was down 7% from a year earlier.
Manganese ore production in the quarter totalled 1.4 million tonnes, up 15% from the 1.3 million tonnes produced in the previous quarter and 6% from the 1.3 million tonnes produced a year earlier. Manganese alloy production fell 20% quarter-on-quarter to 65,000 tonnes from 81,000 tonnes, also down 36% from the 102,000 tonnes produced a year earlier.
Silver production was up 20% quarter-on-quarter to 6.3 million ounces from 5.2 million ounces, but was down 6% from the 6.7 million ounces produced a year earlier.
Lead production was up 11% quarter-on-quarter to 49,000 tonnes from 44,000 tonnes and flat year-on-year, whilst zinc production rose 5% to 20,000 tonnes, also flat from the previous year.
Moving forward, the miner stuck with its production guidance across all commodities apart from its South African manganese production, which is currently under review. That review is expected to be finished by the end of 2015 when South32 will have a clearer outlook of the operation.
"We continue to take decisive action to maximise financial performance, rather than volume. The actions we have initiated at South Africa manganese and South Africa aluminium reflect this philosophy and will further strengthen the cash generating capacity of the group," said South32 Chief Executive Graham Kerr.
By Joshua Warner; [email protected]; @JoshAlliance
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