Diversified miner South32 said on Tuesday that its net cash position had grown $33m to $1.7bn for the quarter to end-September, after stronger commodity markets offset an increase in working capital.
The miner said that industry cost curves, however, continued to steepen as a result of dollar weakness, rising raw material input costs and environmental policy responses in China.
South African coal production decreased during the quarter, which is the first of its financial year, but production of aluminium, nickel and manganese picked up, with the company maintaining its guidance for 2018.
"Annual production guidance is maintained for our operations following generally strong performance across our supply chain," said South32 CEO Graham Kerr.
"Mozal aluminium achieved another production record, payable nickel production rose sharply at Cerro Matoso and we continued to optimise our manganese operations to benefit from elevated prices."
The company said it expected to make a final decision to invest in the Klipspruit extension project by the end of December, its main capital project.
The extension to South32’s Klipspruit Colliery had been delayed by two years, putting the company head to head with the Department of Mineral Resources. The courts ruled in favour of the company in August, which would allow it to make a $265m investment in the first half of its financial year.
South Africa Energy Coal saleable production decreased by 10% in the September quarter as the company completed planned dragline maintenance, relocated critical mobile equipment at the Wolvekrans-Middelburg Complex and continued to deplete existing pits.
Following prior weather-related delays, the development of new mining areas was proceeding, and full-year guidance for 2018 remained unchanged at 27.5-million tonnes, the company said. Export sales were sequentially lower as congestion at the Richards Bay Coal Terminal was not fully cleared in the September quarter.
At 9.52am South32’s share price was down 2.39% to R33.15. The company has gained 21.7% so far this year.
With Allan Seccombe
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