After withdrawing production guidance for its Mozambican smelter last month, diversified mining and metals group South32 has reassured investors by maintaining guidance across its other operations.
The company said on Monday in a quarterly update it had taken steps to mitigate the impact of Mozambique’s ongoing civil unrest on Mozal Aluminium, South32’s aluminium smelter in the country.
“We continued our strong start to the year, maintaining production guidance for all of our operations except Mozal Aluminium, as we continue to mitigate the impact of civil unrest in Mozambique,” CEO Graham Kerr said in an update for the quarter to end-December.
“We achieved strong results in the December 2024 quarter, delivering higher base metals production and increasing alumina production by 14%, capturing the benefit of strong alumina prices.”
Aluminium production was up 5% year on year for the six months to end-December, in line with a 12% increase in low-carbon aluminium production from the Brazil and Mozal smelters.
Further support came from Hillside Aluminium, the largest aluminium smelter in the southern hemisphere, which South32 said continued to test its maximum technical capacity during the period under review.
Despite recording a 2% decrease for the first half, the group’s production of alumina, the precursor to aluminium, increased 14% quarter on quarter in the three months to end-December, allowing it to capture the benefit of strong alumina prices.
The group attributed this second-quarter recovery to improved plant availability at its Brazilian operations and planned maintenance activities at its Australian Worsley mine, part of the operation’s ongoing life-extension project.
The project received the support of Western Australia’s environmental minister last month, with federal approval expected in the first quarter of this year. It will enable South32 to unlock more value from the asset, with the refinery now recognised as one of the world’s largest for alumina, according to the group.
Strong results were also seen in South32’s copper business, with payable copper production at 36.7 kilotonnes (kt) for the six months to end-December, up 16% from the previous comparable period.
The group gave special mention to its Sierra Gorda Chilean mine, where payable copper production increased 21% in the half year as the operation enjoyed higher ore quality.
Compared with the first half of the previous financial year, production of silver, lead and zinc were all down in the six months to end-December, despite the Cannington operation in Australia delivering a 56% increase in payable zinc production in the second quarter.
However, the group maintained production guidance across all metals. Guidance was also maintained for manganese, production of which in the first half was down 38% from the previous comparable period.
Low manganese prices and tough market conditions drove the miner to shut down its Wessels manganese mine in SA in the second quarter. In the absence of sufficient capacity on Transnet’s rail network, the group also reduced its use of higher-cost trucking, bringing down manganese output further.
SA manganese production thus decreased 3% in the half-year. While production guidance was unchanged, South32 said it would continue to monitor and respond to market conditions.
“Having successfully divested Illawarra Metallurgical Coal in the September 2024 quarter, we have a strong balance sheet and platform for growth in minerals and metals critical to the world’s energy transition,” said Kerr.
“We also continued to strengthen our growth pipeline, embedding additional copper exploration options in highly prospective regions during the period.”
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