Mixed result for South32's Aussie ops

SOUTH32 has lifted full-year guidance for its Australia Manganese division but lowered the target for Worsley Alumina.
Mixed result for South32's Aussie ops Mixed result for South32's Aussie ops Mixed result for South32's Aussie ops Mixed result for South32's Aussie ops Mixed result for South32's Aussie ops

South32's Worsley Alumina

Staff reporter

Australia Manganese achieved record year-to-date production of 2.6 million tonnes, a 4% rise.

South32 lifted full-year guidance to 3.5Mt from 3.35Mt previously.

However, guidance at Worsley Alumina, south of Perth was lowered to 3.79Mt from 3.96Mt as the company focuses on initiatives to improve calciner availability and support a sustainable increase in production to 4.6Mt per annum from the 2020 financial year.

Guidance was also lowered at Brazil Alumina by 5%, as the company improves steam generation, and at South Africa Energy Coal due to community protests and a slower-than-expected ramp-up of the Klipspruit after a dragline outage.

Guidance at Illawarra Metallurgical Coal, Cannington, Hillside Aluminium and Mozal Aluminium was maintained.

Unit cost guidance was maintained for all operations.

"We remain focussed on mitigating inflationary pressure and have maintained FY19 unit cost guidance for all our operations," South32 CEO Graham Kerr said.

"We continue to reshape our portfolio having committed to the final year of our Trilogy Metals option, retaining the right to earn a 50% interest in the Upper Kobuk mineral projects.

"The divestment of South Africa Energy Coal is on track with binding bids expected in the June 2019 quarter. Once an acceptable bid is received and evaluated, we expect to reclassify the operation as held for sale.

"Net cash has increased by US$48 million to $726 million, following the return of a further $37 million to shareholders through our on-market share buy-back."

South32 maintained greenfield exploration guidance of $41 million, with $29 million spent in the financial year so far.

That included $12 million at the Hermosa zinc project in Arizona, where the company is planning a maiden JORC resource this quarter.

Shares in South32 closed at A$3.51 yesterday, valuing the company at more than $17.6 billion.