Silver, lead and zinc output dropped in the March quarter due to a mill outage at Cannington in January.

Production at Worsley rose by 5% to just over 1 million tonnes due to a strong operating performance.

Manganese ore production jumped by 33% to 1.2Mt due to the restart in South Africa, while metallurgical coal production surged by 35% to 1.6Mt due to the restart of longwall mining at Dendrobium and the completion of the Appin Area 9 project.

The company said the PC02 project at GEMCO was 98% complete and due for commissioning in the June quarter.

Appin Area 9 and PC02 are both expected to be under budget.

South32 said its estimated net cash position at the end of March was $18 million and its strong balance sheet remained a point of difference.

“We continue to strengthen our balance sheet by focussing on value, not volume,” South32 CEO Graham Kerr said.

“We are making great progress on our cost-out program across all operations and have continued to generate cash despite volatile commodity markets.”

The company said it achieved a $134 million reduction in net debt during the quarter, despite a $30 million foreign exchange rate-related increase in finance lease liabilities, and one-off redundancy and restructuring payments of roughly $23 million.

A restructure announced in February at Worsley, South Africa Manganese and Australia Manganese is mostly complete, while similar initiatives at Cerro Matoso and Illawarra Metallurgical Coal will be completed during the current quarter.

South32 shares are up 52% so far this year and last sat at $A1.62.