REG - South32 Limited - Quarterly Report: December 2024
20/01/2025 07:00
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RNS Number : 9262T South32 Limited 20 January 2025
QUARTERLY REPORT
December 2024
South32 Chief Executive Officer, Graham Kerr: "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.
"We achieved strong results in the December 2024 quarter, delivering higher
base metals production and increasing alumina production by 14 per cent,
capturing the benefit of strong alumina prices.
"We returned US$169M to shareholders, paying fully-franked ordinary dividends
in respect of the prior six months and continuing our on-market share
buy-back, leaving US$171M to be returned to shareholders under our capital
management program.
"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.
"At Hermosa, construction of the zinc-lead-silver Taylor deposit reached a
significant milestone as we commenced shaft sinking in the quarter. We also
progressed development of an exploration decline at the Clark battery-grade
manganese deposit and exploration drilling at the Peake copper deposit to
unlock further value across our broader land package.
"We also continued to strengthen our growth pipeline, embedding additional
copper exploration options in highly prospective regions during the period."
· Maintained FY25 production guidance for all operations, except Mozal
Aluminium, where guidance was withdrawn in December 2024 due to civil unrest
in Mozambique(1).
· Aluminium production increased by 5% in the December 2024 half year as
Hillside Aluminium continued to test its maximum technical capacity, and
low-carbon aluminium(2) production from Brazil Aluminium and Mozal Aluminium
increased by 12%.
· Alumina production declined by 2% in the December 2024 half year, while
quarterly volumes improved by 14% as Worsley Alumina completed planned
calciner maintenance and Brazil Alumina benefitted from improved plant
availability.
· Worsley Alumina received State environmental approval for the Worsley Mine
Development Project(3) and remains on track to receive Federal approval in the
March 2025 quarter.
· Sierra Gorda payable copper equivalent production(4) increased by 21% in the
December 2024 half year as the operation benefitted from improved ore quality
in the current phase of the mine plan.
· Cannington delivered a 56% increase in payable zinc equivalent production(5)
in the December 2024 quarter, as we completed additional dewatering in the
prior quarter, and realised higher planned lead and silver grades.
· Australia Manganese resumed production from the primary concentrator and
progressed construction of infrastructure as part of the recovery plan. A
further US$150M (100% basis) of insurance claims were approved in the December
2024 quarter.
· Commenced shaft sinking at Hermosa's Taylor zinc-lead-silver project and
continued development of an exploration decline for the Clark battery-grade
manganese deposit.
· Acquired a 19.9% interest in American Eagle Gold Corp., which holds an option
to acquire a 100% interest in the Nakinilerak copper porphyry exploration
prospect in British Columbia, Canada(6).
Production summary
South32 share 1H24 1H25 HoH 2Q24 1Q25 2Q25 QoQ
Alumina production (kt) 2,574 2,532 (2%) 1,284 1,184 1,348 14%
Aluminium production (kt) 575 604 5% 287 298 306 3%
Payable copper production (kt) 31.6 36.7 16% 15.6 17.6 19.1 9%
Payable silver production (koz) 6,999 5,916 (15%) 3,624 2,066 3,850 86%
Payable lead production (kt) 58.8 49.6 (16%) 30.3 19.3 30.3 57%
Payable zinc production (kt) 29.0 22.9 (21%) 15.8 12.1 10.8 (11%)
Payable nickel production (kt) 18.3 18.5 1% 10.0 8.6 9.9 15%
Manganese ore production (kwmt) 2,790 1,721 (38%) 1,272 597 1,124 88%
Unless otherwise noted: percentage variance relates to performance during the
December 2024 half year compared with the December 2023 half year (HoH), or
the December 2024 quarter compared with the September 2024 quarter (QoQ);
production and sales volumes are reported on an attributable basis.
CORPORATE UPDATE
Safety
· We remain united by our belief that everyone can go home safe and well every
day. We continued to implement our multi-year Safety Improvement Program
during the December 2024 half year. This includes our investment in safety
leadership through our LEAD Safely Every Day program which is being extended
to frontline employees, contractors that perform high-risk work at our
operations, and functional roles that support them.
· On 17 September 2024, Mr José Luis Pérez was fatally injured in an incident
at Cerro Matoso. Our deepest sympathies remain with Mr Pérez's family and
colleagues to whom we are continuing to provide support. The incident occurred
while Mr Pérez was at Cerro Matoso to perform a scaffold maintenance task. An
investigation into the incident was completed during the December 2024 quarter
and we are engaging with the relevant authorities. Key learnings from the
incident have been shared across our organisation, and improvement actions are
underway.
Financial
· We delivered improved sales performance in our aluminium value chain in the
December 2024 quarter, increasing quarterly sales volumes of alumina and
aluminium by 16% and 10%, respectively, and drawing down inventory. The timing
of sales and higher commodity prices resulted in a temporary increase in trade
receivables and contributed to a build in working capital of ~US$120M in the
December 2024 quarter (H1 FY25: total build of ~US$270M).
· We invested ~US$210M in Group capital expenditure (excluding equity accounted
investments (EAI) and Hermosa) in H1 FY25, including US$57M at Illawarra
Metallurgical Coal prior to its divestment on 29 August 2024(7).
· We received net distributions(8) of US$86M (South32 share) from our Sierra
Gorda EAI in H1 FY25, including US$54M in the December 2024 quarter.
· No funding was provided to Australia Manganese in the December 2024 quarter
(September 2024 quarter: US$63M), as a further US$150M (100% basis) of
external insurance claims were approved in the quarter (H1 FY25: US$250M, 100%
basis). We are continuing to work with our insurers to assess the timing and
value of further recoveries in relation to the impact of Tropical Cyclone
Megan.
· We incurred idle capacity and remediation related costs at Australia Manganese
of ~US$75M (60% basis) in H1 FY25, which will be excluded from Underlying
earnings as an earnings adjustment.
· We returned US$140M in fully-franked ordinary dividends in respect of H2 FY24
during the December 2024 quarter.
· We also returned US$29M via our on-market share buy-back in H1 FY25,
purchasing 12M shares at an average price of A$3.64 per share, leaving US$171M
remaining to be returned to shareholders ahead of extension or expiry of the
program on 12 September 2025(9).
· We made Group tax payments (excluding EAIs) of US$116M in H1 FY25. Our H1 FY25
Group Underlying effective tax rate (ETR) is expected to be ~35%, reflecting
our geographical earnings mix and the corporate tax rates(10) and royalty
related taxes(11) of the jurisdictions in which we operate.
DEVELOPMENT AND EXPLORATION UPDATE
Hermosa project
· We invested ~US$250M of growth capital expenditure at Hermosa in H1 FY25, as
we progressed construction of the Taylor zinc-lead-silver project and an
exploration decline for the Clark battery-grade manganese deposit.
· Construction of Taylor progressed as planned in the December 2024 quarter, as
we commissioned the hoisting system for the ventilation shaft and commenced
sinking. Earthworks for the processing plant site were also completed in the
quarter, with construction activity for the processing plant scheduled to
increase across the second half of FY25.
· We directed US$16M to capitalised exploration in H1 FY25 as we continued to
test the potential for a continuous copper system connecting the Peake copper
deposit and Taylor Deeps.
Greenfield exploration
· We invested US$18M in our greenfield exploration opportunities in H1 FY25 as
we progressed multiple exploration programs targeting base metals in
Australia, USA, Canada, Argentina, Namibia and Ireland.
· We acquired a 19.9% interest in American Eagle Gold Corp. (AEG) for US$21M in
the December 2024 quarter(6). AEG holds an option to acquire a 100% interest
in the Nakinilerak exploration prospect, located within the Babine copper-gold
porphyry district in British Columbia, Canada.
Other exploration
· We invested US$31M (US$26M capitalised) in exploration programs at our
existing operations and development options in H1 FY25, including US$16M at
the Hermosa project (noted above, all capitalised), US$7M for our Sierra Gorda
EAI (all capitalised) and US$3M for our manganese EAI (nil capitalised).
PRODUCTION SUMMARY
Production guidance (South32 share)
FY24 1H25 FY25e((a)) %((b)) Comments
Worsley Alumina
Alumina production (kt) 3,777 1,850 3,750 49%
Brazil Alumina (non-operated)
Alumina production (kt) 1,286 682 1,350 51%
Brazil Aluminium (non-operated)
Aluminium production (kt) 104 64 130 49%
Hillside Aluminium(12)
Aluminium production (kt) 720 362 720 50%
Mozal Aluminium
Aluminium production (kt) 314 178 N/A N/A Production guidance withdrawn in December 2024 due to civil unrest in
Mozambique(1)
Sierra Gorda (non-operated)
Payable copper equivalent production (kt)(4) 73.5 46.4 84.8 55%
Payable copper production (kt) 60.8 36.7 70.0 52%
Payable molybdenum production (kt) 0.9 0.9 1.3 69%
Payable gold production (koz) 24.6 15.9 25.0 64%
Payable silver production (koz) 607 301 550 55%
Cannington
Payable zinc equivalent production (kt)(5) 302.5 129.9 265.4 49%
Payable silver production (koz) 12,666 5,615 11,300 50%
Payable lead production (kt) 112.4 49.6 100.0 50%
Payable zinc production (kt) 60.7 22.9 50.0 46%
Cerro Matoso
Payable nickel production (kt) 40.6 18.5 35.0 53%
Australia Manganese
Manganese ore production (kwmt) 2,324 639 1,000 64%
South Africa Manganese
Manganese ore production (kwmt) 2,175 1,082 2,000 54%
Illawarra Metallurgical Coal(13)
Total coal production (kt) 4,938 766 N/A N/A Results represent ownership period July to August 2024(7)
Metallurgical coal production (kt) 4,305 676 N/A N/A
Energy coal production (kt) 633 90 N/A N/A
a. The denotation (e) refers to an estimate or forecast year.
b. Reflects percentage of achieved production for H1 FY25
compared to current FY25e.
MARKETING UPDATE
The average realised prices achieved for our commodities are summarised below.
Provisionally priced sales were revalued at 31 December 2024 with the final
price of these to be determined in the June 2025 half year.
Realised prices(14)
1H24 2H24 1H25 1H25 1H25
vs vs
1H24 2H24
Worsley Alumina
Alumina (US$/t) 344 376 512 49% 36%
Brazil Alumina (non-operated)((a))
Alumina (US$/t) 362 394 590 63% 50%
Brazil Aluminium (non-operated)((a))
Aluminium (US$/t) 2,275 2,435 2,508 10% 3%
Hillside Aluminium
Aluminium (US$/t) 2,318 2,448 2,687 16% 10%
Mozal Aluminium
Aluminium (US$/t) 2,377 2,610 2,805 18% 7%
Sierra Gorda (non-operated)(15(a))
Payable copper (US$/lb) 3.56 4.19 3.83 8% (9%)
Payable molybdenum (US$/lb) 20.82 20.35 21.68 4% 6%
Payable gold (US$/oz) 1,957 2,342 2,593 32% 11%
Payable silver (US$/oz) 23.3 26.3 31.5 35% 20%
Cannington(15)
Payable silver (US$/oz) 22.5 27.5 29.4 31% 7%
Payable lead (US$/t) 1,979 2,031 1,823 (8%) (10%)
Payable zinc (US$/t) 2,085 2,358 2,739 31% 16%
Cerro Matoso(16)
Payable nickel (US$/lb) 6.00 6.30 6.12 2% (3%)
Australia Manganese(17)
Manganese ore (US$/dmtu, FOB) 3.79 3.71 - - -
South Africa Manganese(17)
Manganese ore (US$/dmtu, FOB) 3.03 4.05 3.85 27% (5%)
Illawarra Metallurgical Coal(13)
Metallurgical coal (US$/t) 276 275 223 (19%) (19%)
Energy coal (US$/t) 101 113 91 (10%) (19%)
a. While Brazil Alumina and Brazil Aluminium are non-operated,
South32 owns the marketing rights for our share of production. While Sierra
Gorda is also non-operated, the Joint Venture is responsible for marketing our
share of production.
OPERATING UNIT COST UPDATE
While we achieved a number of strong production results and realised improved
commodity prices in H1 FY25 that are expected to increase Group operating
margins, compared to the prior period, our Operating unit costs in H1 FY25 are
expected to reflect the impact of higher raw material input costs in our
aluminium value chain. Looking forward, our Operating unit costs in H2 FY25
are expected to benefit from weaker producer currencies.
The below commentary reflects our current expectations for H1 FY25 Operating
unit costs. We will report H1 FY25 Operating unit costs and provide updated
FY25 guidance with our H1 FY25 results announcement.
Operating unit cost((a))
Current Guidance FY25e((b)(c)) H1 FY25 Operating unit cost commentary
Worsley Alumina
(US$/t) 290 Expected to be ~5% above current FY25 guidance due to higher caustic soda
costs.
Brazil Alumina (non-operated)
Not Expected to be largely in-line with H2 FY24 Operating unit costs (US$320/t).
provided
Brazil Aluminium (non-operated)
Not Expected to be ~5% above H2 FY24 Operating unit
costs (US$3,160/t) due to higher alumina
provided prices.
Hillside Aluminium
Not
provided
The cost profile of our South African aluminium smelters is heavily influenced
by the South African rand, and the price of raw materials and energy.
H1 FY25 Operating unit costs for Hillside Aluminium and Mozal Aluminium are
expected to be ~10% above H2 FY24 (US$2,097/t and US$2,238/t, respectively)
due to a stronger South African rand and higher alumina prices.
Mozal Aluminium
Sierra Gorda (non-operated)
(US$/t)((d)) 16.0 Expected to be ~10% above current FY25 guidance, notwithstanding strong
operating performance, due to a drawdown of finished goods inventory in H1
FY25.
Cannington
(US$/t)((d)) 170 Expected to be ~15% above current FY25 guidance due to lower ore processed,
with processed volumes weighted to H2 FY25.
Cerro Matoso
(US$/lb) 5.65 Expected to be ~10% below current FY25 guidance due to further cost
efficiencies, and lower price-linked royalties.
South Africa Manganese
(US$/dmtu FOB) 3.00 Expected to be ~5% above current FY25 guidance due to a stronger South African
rand, partially offset by lower price-linked royalties.
a. Operating unit cost is Revenue less Underlying EBITDA,
excluding third party sales, divided by sales volumes.
b. FY25e Operating unit cost guidance includes royalties
(where appropriate) and commodity price and foreign exchange rate forward
curves or our internal expectations (refer to footnote 18).
c. The denotation (e) refers to an estimate or forecast year.
d. US dollar per tonne of ore processed. Periodic movements in
finished product inventory may impact Operating unit costs.
WORSLEY ALUMINA (86% SHARE)
South32 share 1H24 1H25 HoH 2Q24 1Q25 2Q25 2Q25 2Q25
vs vs
2Q24 1Q25
Alumina production (kt) 1,934 1,850 (4%) 962 850 1,000 4% 18%
Alumina sales (kt) 1,898 1,789 (6%) 985 824 965 (2%) 17%
Worsley Alumina saleable production decreased by 4% (or 84kt) to 1,850kt in
the December 2024 half year, primarily due to constrained bauxite supply as a
result of delayed approvals for new mining areas. Production improved by 18%
(or 150kt) in the December 2024 quarter following the completion of planned
calciner maintenance in the September 2024 quarter. FY25 production guidance
remains unchanged at 3,750kt. Further planned calciner maintenance is
scheduled for the March 2025 quarter.
Sales increased by 17% in the December 2024 quarter due to improved product
availability. We realised a ~11% discount to the Platts Alumina index(19) for
alumina sales in the December 2024 half year, which reflected market based
prices except for a legacy supply contract with Mozal Aluminium which is
linked to the LME aluminium price.
On 20 December 2024, the Western Australian Minister for Environment approved
the Worsley Mine Development Project(3) (the Project), subject to conditions.
We remain on track to receive Federal approval for the Project in the March
2025 quarter.
BRAZIL ALUMINA (36% SHARE, NON-OPERATED)
South32 share 1H24 1H25 HoH 2Q24 1Q25 2Q25 2Q25 2Q25
vs vs
2Q24 1Q25
Alumina production (kt) 640 682 7% 322 334 348 8% 4%
Alumina sales (kt) 647 691 7% 375 326 365 (3%) 12%
Brazil Alumina saleable production increased by 7% (or 42kt) to 682kt in the
December 2024 half year as the refinery benefitted from improved plant
availability. FY25 production guidance remains unchanged at 1,350kt.
During the December 2024 quarter, the joint venture partners of MRN made a
final investment decision to construct a transmission line to connect the MRN
bauxite mine to the Brazilian power grid. The transmission line will enable
MRN to reduce operating costs by replacing its diesel-powered generation with
cost efficient renewable energy sources, and support the future development of
the West Zone mine life extension project. Our share of capital expenditure
for the transmission line is expected to be ~US$70M (33% share) over FY25 to
FY27.
BRAZIL ALUMINIUM (40% SHARE, NON-OPERATED)
South32 share 1H24 1H25 HoH 2Q24 1Q25 2Q25 2Q25 2Q25
vs vs
2Q24 1Q25
Aluminium production (kt) 50 64 28% 26 30 34 31% 13%
Aluminium sales (kt) 40 61 53% 32 25 36 13% 44%
Brazil Aluminium saleable production increased by 28% (or 14kt) to 64kt in the
December 2024 half year as the smelter continued to ramp-up all three
potlines. FY25 production guidance remains unchanged at 130kt.
HILLSIDE ALUMINIUM (100% SHARE)
South32 share 1H24 1H25 HoH 2Q24 1Q25 2Q25 2Q25 2Q25
vs vs
2Q24 1Q25
Aluminium production (kt) 359 362 1% 179 180 182 2% 1%
Aluminium sales (kt) 327 367 12% 157 175 192 22% 10%
Hillside Aluminium saleable production increased by 1% (or 3kt) to 362kt in
the December 2024 half year as the smelter continued to test its maximum
technical capacity, despite the impact of load-shedding. FY25 production
guidance remains unchanged at 720kt(12).
Sales increased by 10% in the December 2024 quarter as our inventory position
returned to normalised levels.
MOZAL ALUMINIUM (63.7% SHARE)
South32 share 1H24 1H25 HoH 2Q24 1Q25 2Q25 2Q25 2Q25
vs vs
2Q24 1Q25
Aluminium production (kt) 166 178 7% 82 88 90 10% 2%
Aluminium sales (kt) 167 174 4% 90 86 88 (2%) 2%
Mozal Aluminium saleable production increased by 7% (or 12kt) to 178kt in the
December 2024 half year as the smelter approached nameplate capacity following
completion of its operational recovery plan, despite the impact of
load-shedding.
In December 2024, the transport of raw materials to the smelter was disrupted
by road blockages due to civil unrest in Mozambique(1). We subsequently
reduced amperage to the potlines(20), reducing aluminium production capacity
by approximately 3%, to preserve raw materials and maintain operational
stability.
In recent weeks, we have re-built alumina stocks at the smelter as we
successfully implemented contingency plans and road blockages eased. While
Mozal Aluminium has continued to operate and export aluminium to customers
during this period, any escalation in civil unrest has the potential to impact
our critical trucking activity and operations. Accordingly, production
guidance remains withdrawn as we monitor and respond to the evolving
situation.
As previously disclosed, we continue to work with Eskom and the Government of
the Republic of Mozambique to extend the smelter's hydro-electric power supply
beyond March 2026, as there are currently no viable alternative suppliers of
renewable energy at the required scale.
SIERRA GORDA (45% SHARE)
South32 share 1H24 1H25 HoH 2Q24 1Q25 2Q25 2Q25 2Q25
vs vs
2Q24 1Q25
Payable copper equivalent production (kt)(4) 38.4 46.4 21% 18.3 22.1 24.3 33% 10%
Payable copper production (kt) 31.6 36.7 16% 15.6 17.6 19.1 22% 9%
Payable copper sales (kt) 32.5 37.9 17% 17.2 17.9 20.0 16% 12%
Sierra Gorda payable copper equivalent production(4) increased by 21% (or
8.0kt) to 46.4kt in the December 2024 half year, with higher planned copper
grades and a significant increase in molybdenum recoveries due to improved ore
quality. FY25 production guidance remains unchanged at 84.8kt payable copper
equivalent (copper 70.0kt, molybdenum 1.3kt, gold 25.0koz and silver 550koz).
Sierra Gorda continued additional engineering and study work for the fourth
grinding line expansion during the December 2024 quarter. A feasibility study
and final investment decision by the joint venture partners is expected in the
second half of calendar year 2025.
CANNINGTON (100% SHARE)
South32 share 1H24 1H25 HoH 2Q24 1Q25 2Q25 2Q25 2Q25
vs vs
2Q24 1Q25
Payable zinc equivalent production (kt)(5) 156.3 129.9 (17%) 81.6 50.7 79.2 (3%) 56%
Payable silver production (koz) 6,704 5,615 (16%) 3,474 1,915 3,700 7% 93%
Payable silver sales (koz) 6,529 5,469 (16%) 3,656 2,342 3,127 (14%) 34%
Payable lead production (kt) 58.8 49.6 (16%) 30.3 19.3 30.3 0% 57%
Payable lead sales (kt) 56.6 54.3 (4%) 31.0 25.1 29.2 (6%) 16%
Payable zinc production (kt) 29.0 22.9 (21%) 15.8 12.1 10.8 (32%) (11%)
Payable zinc sales (kt) 28.3 23.0 (19%) 14.4 12.6 10.4 (28%) (17%)
Cannington payable zinc equivalent production(5) decreased by 17% (or 26.4kt)
to 129.9kt in the December 2024 half year as the operation continued to manage
increased underground activity and complexity. Ore mined and plant throughput
increased by 28% and 23%, respectively, in the December 2024 quarter,
following the completion of additional dewatering in the prior quarter. This
improved plant throughput, together with higher planned lead and silver
grades, supported a 56% increase in payable zinc equivalent production in the
December 2024 quarter.
FY25 production guidance remains unchanged at 265.4kt payable zinc equivalent
(silver 11,300koz, lead 100.0kt and zinc 50.0kt).
CERRO MATOSO (99.9% SHARE)
South32 share 1H24 1H25 HoH 2Q24 1Q25 2Q25 2Q25 2Q25
vs vs
2Q24 1Q25
Payable nickel production (kt) 18.3 18.5 1% 10.0 8.6 9.9 (1%) 15%
Payable nickel sales (kt) 18.0 17.7 (2%) 9.5 8.8 8.9 (6%) 1%
Cerro Matoso payable nickel production increased by 1% (or 0.2kt) to 18.5kt in
the December 2024 half year, while production improved by 15% (or 1.3kt) in
the December 2024 quarter due to higher plant utilisation. FY25 production
guidance remains unchanged at 35.0kt.
We continued to progress our strategic review of Cerro Matoso and will provide
an update with our H1 FY25 results announcement.
AUSTRALIA MANGANESE (60% SHARE)
South32 share 1H24 1H25 HoH 2Q24 1Q25 2Q25 2Q25 2Q25
vs vs
2Q24 1Q25
Manganese ore production (kwmt) 1,679 639 N/A 789 - 639 N/A N/A
Manganese ore sales (kwmt) 1,864 - N/A 924 - - N/A N/A
Australia Manganese continued to implement its operational recovery plan
following the impacts of Tropical Cyclone Megan in the March 2024 quarter.
We continued a substantial dewatering program which has enabled access to
certain mining pits and a phased restart of mining activities. We resumed
production from the primary concentrator as planned in the December 2024
quarter with saleable production of 639kwmt. FY25 production guidance remains
unchanged at 1,000kwmt, with production expected to continue at limited rates
in the second half of FY25 as we progress the recovery plan and complete
further dewatering.
Construction of a critical bridge that connects the northern pits of the
Western Leases mining area and the processing plant progressed as planned in
the December 2024 quarter and remains on track to be completed in the March
2025 quarter.
During the December 2024 quarter, we progressed the demolition of undersea
structures, and commenced installing the pilings for the new wharf. While we
have experienced some weather related delays, a second jack-up barge has
arrived on site and is expected to improve the productivity of the pilings
installation.
Subject to further potential impacts from the wet season, export sales are
expected to progressively increase over the June 2025 quarter.
SOUTH AFRICA MANGANESE (ORE 54.6% SHARE)
South32 share 1H24 1H25 HoH 2Q24 1Q25 2Q25 2Q25 2Q25
vs vs
2Q24 1Q25
Manganese ore production (kwmt) 1,111 1,082 (3%) 483 597 485 0% (19%)
Manganese ore sales (kwmt) 1,082 1,088 1% 564 590 498 (12%) (16%)
South Africa Manganese saleable production decreased by 3% (or 29kwmt) to
1,082kwmt in the December 2024 half year, as we reduced our use of higher cost
trucking and undertook a temporary shut at our Wessels mine in the December
2024 quarter, in response to market conditions. While FY25 production guidance
remains unchanged at 2,000kwmt, we will continue to monitor and respond to
market conditions.
NOTES
1. Refer to market release "Mozal Aluminium Update" dated 10 December 2024.
2. Refers to aluminium produced in a process that results in less than 4t CO(2)-e
Scope 1 and Scope 2 greenhouse gas (GHG) emissions per tonne of aluminium.
3. Refer to market release "Worsley Mine Development Project Receives State
Approval" dated 20 December 2024.
4. Payable copper equivalent production (kt) was calculated by aggregating
revenues from copper, molybdenum, gold and silver, and dividing the total
Revenue by the price of copper. FY24 realised prices for copper (US$3.86/lb),
molybdenum (US$20.60/lb), gold (US$2,129/oz) and silver (US$24.8/oz) have been
used for FY24, H1 FY25 and FY25e.
5. Payable zinc equivalent production (kt) was calculated by aggregating revenues
from payable silver, lead and zinc, and dividing the total Revenue by the
price of zinc. FY24 realised prices for zinc (US$2,230/t), lead (US$2,002/t)
and silver (US$24.8/oz) have been used for FY24, H1 FY25 and FY25e.
6. Refer to media release "South32 Invests in American Eagle Gold" dated 11
November 2024.
7. On 29 August 2024, we completed the sale of Illawarra Metallurgical Coal (the
Transaction) to an entity owned by Golden Energy and Resources Pte Ltd and M
Resources Pty Ltd, receiving upfront cash proceeds of US$964M. The upfront
cash consideration comprised of US$1,050M less the already received deposit
(US$40M) and a provisional adjustment for working capital, net debt and
capital expenditure (US$46M). A final adjustment to the purchase price is now
expected to be determined in the March 2025 quarter. The total Transaction
consideration includes deferred cash consideration of US$250M, payable in
March 2030, and contingent price-linked cash consideration of up to US$350M.
8. Net distributions from our material equity accounted investments (EAI)
(manganese and Sierra Gorda) includes dividends, capital contributions and net
repayments/drawdowns of shareholder loans, which are unaudited and should not
be considered as an indication of or alternative to an IFRS measure of
profitability, financial performance or liquidity.
9. Since inception of our capital management program, US$1.8B has been allocated
to our on-market share buy-back (806M shares at an average price of A$3.06 per
share) and US$525M returned in the form of special dividends.
10. The corporate tax rates of the geographies where the Group operates include:
Australia 30%, South Africa 27%, Colombia 35%, Mozambique 0%, Brazil 34%, and
Chile 27%. The Mozambique operations are subject to a royalty on revenues
instead of income tax.
11. Australia Manganese is subject to a royalty related tax equal to 20% of
adjusted EBIT. Sierra Gorda is subject to a royalty related tax based on the
amount of copper sold and the mining operating margin, the rate is between 5%
and 14% for annual sales over 50kt of refined copper. These royalties are
included in Underlying tax expense.
12. Production guidance for Hillside Aluminium does not assume any load-shedding
impact on production.
13. Reflects the period from 1 July 2024 to completion of the Transaction on 29
August 2024.
14. Realised prices are unaudited. Volumes and prices do not include any third
party trading that may be undertaken independently of equity production.
Realised sales price is calculated as sales Revenue divided by sales volume
unless otherwise stated.
15. Realised prices for Sierra Gorda and Cannington are net of treatment and
refining charges.
16. Realised nickel sales prices are inclusive of by-products.
17. Realised ore prices are calculated as external sales Revenue less freight and
marketing costs, divided by external sales volume.
18. FY25 Operating unit cost guidance includes royalties (where appropriate) and
the influence of exchange rates, and includes various assumptions for FY25,
including: an alumina price of US$480/t; a manganese ore price of US$7.80/dmtu
for 44% manganese product; a nickel price of US$7.50/lb; a silver price of
US$27.8/oz; a lead price of US$2,070/t (gross of treatment and refining
charges); a zinc price of US$2,750/t (gross of treatment and refining
charges); a copper price of US$4.40/lb (gross of treatment and refining
charges); a molybdenum price of US$17.50/lb (gross of treatment and refining
charges); a gold price of US$2,300/oz; an AUD:USD exchange rate of 0.65; a
USD:ZAR exchange rate of 18.50; a USD:COP exchange rate of 4,100; USD:CLP
exchange rate of 900; and a reference price for caustic soda; which reflect
forward markets as at August 2024 or our internal expectations.
19. The sales volume weighted average of the Platts Alumina index (FOB) on the
basis of a one-month lag to published pricing (Month minus one or "M-1") was
US$577/t in the December 2024 half year.
20. Refer to market release "Mozal Aluminium Update" dated 19 December 2024.
21. Illawarra Metallurgical Coal sales are adjusted for moisture and will not
reconcile directly to Illawarra Metallurgical Coal production.
The following abbreviations have been used throughout this report: US$ million
(US$M); US$ billion (US$B); grams per tonne (g/t); tonnes (t); thousand tonnes
(kt); thousand tonnes per annum (ktpa); million tonnes (Mt); million tonnes
per annum (Mtpa); ounces (oz); thousand ounces (koz); million ounces (Moz);
thousand wet metric tonnes (kwmt); million wet metric tonnes (Mwmt); million
wet metric tonnes per annum (Mwmt pa); dry metric tonne unit (dmtu); thousand
dry metric tonnes (kdmt); Mineração Rio do Norte (MRN).
Figures in Italics indicate that an adjustment has been made since the figures
were previously reported. The denotation (e) refers to an estimate or forecast
year.
OPERATING PERFORMANCE
South32 share 1H24 1H25 2Q24 3Q24 4Q24 1Q25 2Q25
Worsley Alumina (86% share)
Alumina hydrate production (kt) 1,934 1,872 961 926 919 932 940
Alumina production (kt) 1,934 1,850 962 927 916 850 1,000
Alumina sales (kt) 1,898 1,789 985 895 974 824 965
Brazil Alumina (36% share)
Alumina production (kt) 640 682 322 313 333 334 348
Alumina sales (kt) 647 691 375 277 358 326 365
Brazil Aluminium (40% share)
Aluminium production (kt) 50 64 26 26 28 30 34
Aluminium sales (kt) 40 61 32 32 30 25 36
Hillside Aluminium (100% share)
Aluminium production (kt) 359 362 179 181 180 180 182
Aluminium sales (kt) 327 367 157 209 184 175 192
Mozal Aluminium (63.7% share)
Aluminium production (kt) 166 178 82 71 77 88 90
Aluminium sales (kt) 167 174 90 58 101 86 88
Sierra Gorda (45% share)
Ore mined (Mt) 11.9 12.6 6.0 3.1 4.9 6.4 6.2
Ore processed (Mt) 10.9 11.1 5.4 5.5 5.5 5.6 5.5
Copper ore grade processed (%, Cu) 0.37 0.42 0.38 0.34 0.37 0.41 0.44
Payable copper equivalent production (kt)(4) 38.4 46.4 18.3 16.7 18.4 22.1 24.3
Payable copper production (kt) 31.6 36.7 15.6 13.9 15.3 17.6 19.1
Payable copper sales (kt) 32.5 37.9 17.2 13.1 15.3 17.9 20.0
Payable molybdenum production (kt) 0.5 0.9 0.1 0.2 0.2 0.4 0.5
Payable molybdenum sales (kt) 0.7 0.7 0.3 0.4 0.2 0.2 0.5
Payable gold production (koz) 13.4 15.9 7.1 5.3 5.9 7.7 8.2
Payable gold sales (koz) 13.8 16.2 7.5 5.2 5.9 7.8 8.4
Payable silver production (koz) 295 301 150 153 159 151 150
Payable silver sales (koz) 300 317 160 141 164 157 160
South32 share 1H24 1H25 2Q24 3Q24 4Q24 1Q25 2Q25
Cannington (100% share)
Ore mined (kwmt) 1,150 999 599 529 573 438 561
Ore processed (kdmt) 1,139 982 577 525 557 440 542
Silver ore grade processed (g/t, Ag) 211 206 216 200 199 163 241
Lead ore grade processed (%, Pb) 6.0 5.9 6.2 5.6 5.9 5.1 6.5
Zinc ore grade processed (%, Zn) 3.4 3.2 3.6 3.8 4.1 3.7 2.8
Payable zinc equivalent production (kt)(5) 156.3 129.9 81.6 68.8 77.3 50.7 79.2
Payable silver production (koz) 6,704 5,615 3,474 2,897 3,065 1,915 3,700
Payable silver sales (koz) 6,529 5,469 3,656 2,210 3,054 2,342 3,127
Payable lead production (kt) 58.8 49.6 30.3 24.8 28.8 19.3 30.3
Payable lead sales (kt) 56.6 54.3 31.0 17.9 27.9 25.1 29.2
Payable zinc production (kt) 29.0 22.9 15.8 14.3 17.4 12.1 10.8
Payable zinc sales (kt) 28.3 23.0 14.4 11.6 20.2 12.6 10.4
Cerro Matoso (99.9% share)
Ore mined (kwmt) 2,183 2,648 1,243 1,486 1,526 1,338 1,310
Ore processed (kdmt) 1,317 1,396 723 711 746 664 732
Ore grade processed (%, Ni) 1.55 1.48 1.53 1.61 1.70 1.46 1.49
Payable nickel production (kt) 18.3 18.5 10.0 10.8 11.5 8.6 9.9
Payable nickel sales (kt) 18.0 17.7 9.5 10.8 12.1 8.8 8.9
Australia Manganese (60% share)
Manganese ore production (kwmt) 1,679 639 789 645 - - 639
Manganese ore sales (kwmt) 1,864 - 924 709 - - -
Ore grade sold (%, Mn) 42.6 - 42.2 42.2 - - -
South Africa Manganese (54.6% share)
Manganese ore production (kwmt) 1,111 1,082 483 530 534 597 485
Manganese ore sales (kwmt) 1,082 1,088 564 485 549 590 498
Ore grade sold (%, Mn) 38.7 39.0 38.4 38.7 39.1 38.9 39.1
Illawarra Metallurgical Coal (100% share)(13)
Total coal production (kt) 2,045 766 877 1,405 1,488 766 -
Total coal sales (kt)(21) 2,096 540 900 1,238 1,537 540 -
Metallurgical coal production (kt) 1,787 676 744 1,244 1,274 676 -
Metallurgical coal sales (kt) 1,759 507 763 1,053 1,360 507 -
Energy coal production (kt) 258 90 133 161 214 90 -
Energy coal sales (kt) 337 33 137 185 177 33 -
Forward-looking statements
This release contains forward-looking statements, including statements about
trends in commodity prices and currency exchange rates; demand for
commodities; production forecasts; plans, strategies and objectives of
management; capital costs and scheduling; operating costs; anticipated
productive lives of projects, mines and facilities; and provisions and
contingent liabilities. These forward-looking statements reflect expectations
at the date of this release, however they are not guarantees or predictions of
future performance. They involve known and unknown risks, uncertainties and
other factors, many of which are beyond our control, and which may cause
actual results to differ materially from those expressed in the statements
contained in this release. Readers are cautioned not to put undue reliance on
forward-looking statements. Except as required by applicable laws or
regulations, the South32 Group does not undertake to publicly update or review
any forward-looking statements, whether as a result of new information or
future events. Past performance cannot be relied on as a guide to future
performance. South32 cautions against reliance on any forward-looking
statements or guidance.
FURTHER INFORMATION
INVESTOR RELATIONS MEDIA RELATIONS
Ben Baker Jamie Macdonald Miles Godfrey
M +61 408 925 140
M +61 415 325 906
M +61 403 763 086
E Jamie.Macdonald@south32.net E Miles.Godfrey@south32.net
E Ben.Baker@south32.net
Approved for release to the market by Graham Kerr, Chief Executive Officer
JSE Sponsor: The Standard Bank of South Africa Limited
20 January 2025
South32 Limited
(Incorporated in Australia under the Corporations Act 2001 (Cth))
(ACN 093 732 597)
ASX / LSE / JSE Share Code: S32; ADR: SOUHY
ISIN: AU000000S320
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