Quarterly alumina production was up 4% to 1.33 million tonnes due to record production at Brazil Alumina and above-nameplate performance at Worsley Alumina.

Nickel production from Cerro Matoso in Colombia was up 26% for the half to 16,100t following the completion of a furnace refurbishment.

At Cannington in Queensland, half-year zinc, lead and silver production was up 8%, 5% and 12% respectively.

Full-year zinc equivalent production was lifted to 292,200t due to strong underground mine performance and higher average grades.

A 19% quarterly fall in Australia Manganese production due to weather and COVID-19 saw South32 cut full-year guidance by 9% to 3.2Mt.

At Illawarra Metallurgical Coal, December half production of 3.1Mt was lower due to the completion of an extended longwall move, but the company left FY22 guidance at 7.3Mt subject to further COVID-19 impacts.

South32 achieved record aluminium pricing in the December half.

The company has building aluminium inventory due to supply chain disruptions.

"We achieved a number of strong production results across our portfolio and realised significantly higher commodity prices in the December 2021 half year, lifting operating margins across the group," South32 CEO Graham Kerr said.

"We delivered higher base metals production and our integrated aluminium supply chain benefitted from additional alumina volumes and record aluminium prices.

"We took further steps to reshape our portfolio for a low carbon future, increasing our exposure to critical metals with our planned acquisition of a 45% interest in the Sierra Gorda copper mine in Chile and further investment in green aluminium."

The US$1.55 billion Sierra Gorda acquisition is expected to be finalised in the current quarter.

"We expect to grow our total share of aluminium production by approximately 24% to 1.2Mt in FY23, through our proposed acquisition of an additional interest in the hydro powered Mozal Aluminium smelter and the restart of the Brazil Aluminium smelter using 100% renewable power," Kerr said.

South32 returned $316 million to shareholders during the period via an on-market buy-back and the payment of dividends.

The company spent $13 million on greenfields exploration and $24 million on brownfields exploration during the half.

"Looking forward our shareholders are well positioned to benefit from stronger markets and production growth, with our capital management framework designed to reward owners as our financial performance improves," Kerr said.

South32 shares opened sharply lower this morning, falling by 6.8% to A$3.81, a 2022 low.