21st Jul 2021 09:45
(Alliance News) - South32 Ltd on Wednesday posted a largely solid production performance for its recently ended financial year, with rises in output from coal, silver and zinc, but warned of an impairment charge for its financial results.
Also on Wednesday, the diversified miner announced an updated resource estimate for Taylor deposit, which is part of the Hermosa project in Arizona, US, following continued work in supporting the pre-feasibility study for the project.
The new resource estimate for the deposit is at 138 million tonnes, containing 5.3 million tonnes of zinc, 5.9 million tonnes of lead and 360 million ounces of silver.
Although the overall size has been reduced from June 2020's estimate of 167 million tonnes, the zinc equivalent grades has been increased to 8.61% from 7.62%.
For the year ended June 30, total aluminium production dipped 0.4% at 982,000 tonnes from 986,000 tonnes the prior year, as Hillside Aluminium in South Africa and Mozal in Mozambique were hindered by increased loadshedding.
For the quarter, aluminium output edged up 1% to 246,000 tonnes.
Metallurgical coal production rose 11% year-on-year to 6.17 million tonnes from 5.55 million tonnes, with a stronger performance from the Illwarra Metallurgical Coal business due to a return to a three longwall configuration, allowing for greater mining efficiency.
Energy coal edged up 1% to 1.48 million tonnes for the year, but was down 10% to 385,000 tonnes for the quarter.
In other commodities, annual zinc production grew 1% to 67,700 tonnes, while silver rose 16% year-on-year to 13.7 million tonnes. In addition, lead output rose 19% to 131,800 tonnes, however nickel production dropped 16% to 34,100 tonnes.
Looking ahead, however, South32 said it expects to incur a USD728 million pretax impairment charge for its annual results, liked to Illwarra.
The charge reflects uncertainty after the New South Wales Independent Planning Commission's decision to refuse South32's application for the Dendrobium Next Domain life extension project.
South32 had been seeking approval to extend the life of the mine until the end of 2048 and extract an additional 78 million tonnes of run-of-mine coal from two new areas near Avon and Coredaux Dams.
However, in its report published in February the Commission highlighted significant concerns over the proposed mine design, including its significant risk of "long-term and irreversible damage to Greater Sydney and Illawarra's drinking water catchment".
"We made substantial progress reshaping our portfolio during the year, completing the divestments of South Africa Energy Coal and the TEMCO manganese alloy smelter, while progressing studies for our base metals development options at Hermosa and Ambler Metals. This, along with the release of our medium-term target to halve our operational emissions by 2035, positions us well as the world transitions to a low carbon future," said Chief Executive Officer Graham Kerr.
Shares in South32 were up 0.3% at 153.00 pence on Wednesday in London, while its Johannesburg shares were 1.3% higher at ZAR30.62.
By Dayo Laniyan; [email protected]
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