24th Jul 2023 10:57
(Alliance News) - South32 Ltd warned on Monday it will book an impairment charge of a whopping USD1.30 billion for the full-year period related to its US-based Hermosa project.
The Hermosa project, located in Arizona, US, is made up of Taylor zinc-lead-silver deposits, and Clark battery-grade manganese deposits.
The Perth-based diversified mining group said, for accounting purposes, it was required to separately assess the Taylor deposit, Clark deposit and regional exploration land package.
As a result of this assessment, its financial results for the year that ended June 30 will include a non-cash impairment expense of USD1.30 billion in relation to the Taylor deposit.
Shares in South32 fell 2.8% to ZAR45.25 on Monday morning in Johannesburg, and were down 2.3% to 195.80 pence in London.
South32 also upgraded the mineral resource estimate for the Taylor deposit to 153 million tonnes. The upgrade includes a 41% increase in the measured mineral resource, providing a compelling base to underpin future production.
In a production update, South32 said alumina production fell 4% to 5.28 million tonnes for the financial year that ended June 30 from 5.10 million a year earlier.
Year-on-year, alumina output was up 8.2% to 1.24 million tonnes in the fourth quarter from 1.36 million tonnes. Compared to the third quarter, production was 1% higher at 1.23 million tonnes.
Annual aluminium production rose by 14% to 1.13 million tonnes from 992,000 tonnes. For the fourth quarter, output increased by 12% to 286,000 tonnes from 255,000 tonnes in the same quarter last year. Production grew just 3% from 279,000 tonnes in the third quarter.
Payable copper production multiplied to 70,700 tonnes annually from 25,300 tonnes.
Copper output was 2.4% higher at 17,300 tonnes in the fourth quarter from 16,900 tonnes in the fourth quarter last year. Production rose 12% from 15,500 in the third quarter.
For 12 months, metallurgical coal production eased 4% to 5.71 million tonnes from 5.49 million tonnes. Production improved 8.9% to 1.50 million tonnes in the fourth quarter from 1.38 million tonnes in the corresponding period last year. Quarter-on-quarter, output rose 21% from 1.24 million tonnes.
Payable nickel production inched down 2% to 40,800 tonnes for the year from 41,700 tonnes. Production was flat at 10,200 tonnes in the fourth quarter from 10,800 tonnes in the fourth quarter in 2022. It was also unchanged from 10,200 tonnes in the third quarter.
Annual manganese ore production was up 4% to 5.65 million wet tonnes from 5.43 million wet tonnes. In the fourth quarter, production was up marginally, rising 1% to 1.45 million wet tonnes from 1.46 million wet tonnes. Output was up 15% from 1.26 million wet tonnes in the third quarter.
"We achieved strong year-on-year growth in aluminium, copper and manganese, setting three annual production records and realising the benefit of our investments in commodities for a low-carbon future," South32 said.
South32 expects to report 2023 financial year operating unit costs in line with prior guidance.
By Artwell Dlamini, Alliance News reporter
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