REG - South32 Limited - Quarterly Report: September 2024
21/10/2024 07:00
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RNS Number : 8871I South32 Limited 21 October 2024
QUARTERLY REPORT
September 2024
South32 Chief Executive Officer, Graham Kerr: "We were devastated by the loss
of Mr José Luis Pérez, who was fatally injured in an incident at Cerro
Matoso on 17 September and we express our sincere and deepest sympathies to
his family, friends and colleagues.
"We remain committed to improving our safety performance. We continue to
implement our Safety Improvement Program, which will help us to achieve a step
change in our performance so that everyone goes home safe and well every day.
"We have maintained annual production guidance for all of our operations with
a strong start to the year in aluminium and a 20 per cent uplift in copper
equivalent volumes from Sierra Gorda.
"Completing the sale of Illawarra Metallurgical Coal is a major milestone in
our portfolio transformation which has unlocked significant value and
streamlined our business toward commodities critical for a low-carbon future.
"The sale has also lowered our sustaining capital intensity and strengthened
our financial position, enabling us to self fund our growth in base metals and
deliver returns to shareholders via our on-market share buy-back.
"At Hermosa, construction of our large-scale, long-life Taylor
zinc-lead-silver project is progressing as planned and we are continuing to
unlock value across our broader land package.
"During the quarter, Hermosa was selected for a US$166 million award
negotiation from the US Department of Energy, which recognises Clark's
potential to supply battery-grade manganese for the emerging North American
market.
"Our transformed portfolio, focused on copper, zinc and our aluminium value
chain, leaves us well placed to capitalise on the global energy transition and
stronger market conditions to start the year."
· Completed the sale of Illawarra Metallurgical Coal and received upfront cash
proceeds of US$964M(1).
· Expanded our capital management program by US$200M and commenced our on-market
share buy-back.
· Maintained FY25 production guidance for all operations.
· Aluminium production increased by 5% 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%.
· Worsley Alumina saleable production declined by 7% as planned calciner
maintenance was undertaken and we managed constrained bauxite supply. The
Western Australian Environment Minister is expected to consider approval of
new bauxite mining areas in December 2024, with Federal approvals expected
shortly thereafter.
· Brazil Alumina saleable production was largely unchanged as plant availability
continued to improve. A preliminary environmental license for the MRN West
Zone mine life extension project was issued during the September 2024
quarter.
· Sierra Gorda payable copper equivalent production(3) increased by 20% due to
higher planned copper grades and a significant increase in molybdenum
recoveries as a result of improved ore quality.
· Cannington payable zinc equivalent production(4) declined by 34% due to
challenging ground conditions, resulting in the deferral of a higher grade
stope to the December 2024 quarter.
· South Africa Manganese production increased by 12% as the operation delivered
strong mining performance and continued to sell secondary products to maximise
margins.
· Australia Manganese continued a substantial dewatering program and remains on
track to resume production in the December 2024 quarter. Initial external
insurance recoveries of US$100M (100% basis) were received during the quarter.
· Continued construction of Hermosa's Taylor zinc-lead-silver project as
planned. Clark was selected for a US$166M award negotiation from the US
Department of Energy for a potential commercial-scale battery-grade manganese
facility(5).
· Entered into a strategic alliance to explore for copper in the Kalahari copper
belt in Namibia and an earn-in agreement for a zinc-lead-silver prospect in
Nevada, USA.
Production summary
South32 share YTD FY24 YTD FY25 YoY 1Q24 4Q24 1Q25 QoQ
Alumina production (kt) 1,290 1,184 (8%) 1,290 1,249 1,184 (5%)
Aluminium production (kt) 288 298 3% 288 285 298 5%
Payable copper production (kt) 16.0 17.6 10% 16.0 15.3 17.6 15%
Payable silver production (koz) 3,375 2,066 (39%) 3,375 3,224 2,066 (36%)
Payable lead production (kt) 28.5 19.3 (32%) 28.5 28.8 19.3 (33%)
Payable zinc production (kt) 13.2 12.1 (8%) 13.2 17.4 12.1 (30%)
Payable nickel production (kt) 8.3 8.6 4% 8.3 11.5 8.6 (25%)
Manganese ore production (kwmt) 1,518 597 (61%) 1,518 534 597 12%
Unless otherwise noted: percentage variance relates to performance during the
September 2024 quarter compared with the September 2023 quarter (YoY), or the
September 2024 quarter compared with the June 2024 quarter (QoQ); production
and sales volumes are reported on an attributable basis.
CORPORATE UPDATE
Safety
· On 17 September 2024, Mr José Luis Pérez was fatally injured in an incident
at Cerro Matoso, our ferronickel operation in Colombia. Our deepest sympathies
are with Mr Pérez's family and colleagues to whom we are providing support
and counselling. An investigation into the incident is underway and we are
engaging with the relevant authorities.
· We remain united by our belief that everyone can go home safe and well every
day. We are continuing to implement our global multi-year Safety Improvement
Program to deliver improved safety performance, including investment in safety
leadership through our LEAD Safely Every Day Program which has been completed
by more than 1,500 leaders, employees and contractors in our business.
Sustainability
· Worsley Alumina achieved performance standard certification against the
Aluminium Stewardship Initiative (ASI), a certification organisation which
aims to foster responsible production, sourcing and stewardship of
aluminium. With Mozal Aluminium also having ASI certification, we can now
deliver aluminium with full value chain certification from the mining and
refining of bauxite to alumina at Worsley Alumina, to the production of
aluminium at Mozal Aluminium.
Portfolio
· 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(1). The total
Transaction consideration also includes deferred cash consideration of
US$250M, payable in March 2030, and contingent price-linked cash consideration
of up to US$350M(6).
· On 12 August 2024, we completed the sale of our 50% interest in the Eagle
Downs metallurgical coal project to a subsidiary of Stanmore Resources
Limited, for US$18M(7) in cash, a contingent payment of US$20M(8) and a
price-linked royalty of up to US$100M(9).
Financial
· Net debt(10) decreased by US$723M to US$39M in the September 2024 quarter as
we completed the sale of Illawarra Metallurgical Coal, continued our
investment in growth at Hermosa, and experienced a temporary build in working
capital.
· Working capital increased by approximately US$150M during the September 2024
quarter, primarily related to a temporary increase in work in progress and
finished goods inventories in our aluminium value chain.
· We provided funding of US$63M to our manganese equity accounted investment
(EAI) during the September 2024 quarter to support the operational recovery
plan at Australia Manganese following the impacts of Tropical Cyclone Megan.
· Our manganese EAI received initial recoveries of US$100M (100% basis) from
external insurers and a one-off recovery of US$50M (100% basis) under the
Group's captive insurance program during the September 2024 quarter. We are
continuing to work with our insurers to assess the timing and value of further
recoveries under property damage and business interruption policies.
· We received net distributions(11) of US$32M (South32 share) from our Sierra
Gorda EAI during the September 2024 quarter, with a further distribution
anticipated in the December 2024 quarter.
· We invested US$135M in Group capital expenditure (excluding EAIs and Hermosa)
during the September 2024 quarter, including US$57M at Illawarra Metallurgical
Coal prior to completion of the Transaction.
· We made Group tax payments of US$47M (excluding EAIs) during the September
2024 quarter.
· Reflecting our strengthened financial position and disciplined approach to
capital allocation, we expanded our capital management program by US$200M, and
commenced our on-market share buy-back in September 2024. We spent US$3M
purchasing 1M shares at an average price of A$3.26 per share in September
2024, leaving US$197M remaining to be returned to shareholders ahead of
extension or expiry of the program on 12 September 2025(12).
· Following the end of the September 2024 quarter, we paid a fully-franked
ordinary dividend of US$140M in respect of the June 2024 half year.
DEVELOPMENT AND EXPLORATION UPDATE
Hermosa project
· We invested US$123M in growth capital expenditure at Hermosa during the
September 2024 quarter, as we progressed construction of the Taylor
zinc-lead-silver project and an exploration decline for the Clark
battery-grade manganese deposit.
· All critical path dewatering wells for both Taylor and Clark were commissioned
during the September 2024 quarter.
· Construction of Taylor progressed as planned. The main shaft headframe has
been completed and commissioning of the hoisting system for the ventilation
shaft is underway. Shaft sinking is on track to commence in the December 2024
quarter.
· Clark was selected for an award negotiation of up to US$166M from the US
Department of Energy under the Battery Materials Processing and Battery
Manufacturing program(5), to support the potential development of a
commercial-scale battery-grade manganese production facility.
· We directed US$7M to capitalised exploration during the September 2024 quarter
as we continued to test the potential for a continuous copper system
connecting Peake and Taylor Deeps.
Greenfield exploration
· We invested US$7M in our greenfield exploration opportunities during the
September 2024 quarter as we progressed multiple exploration programs
targeting base metals in Australia, USA, Canada, Argentina and Ireland.
· We added to our portfolio of prospective exploration options, forming a
strategic alliance with Noronex Limited to explore for copper in the Kalahari
copper belt in Namibia, and signed an earn-in agreement with Ridgeline
Minerals for the Selena zinc-lead-silver carbonate replacement deposit style
prospect in Nevada, USA.
Other exploration
· We invested US$15M (US$13M capitalised) in exploration programs at our
existing operations and development options during the September 2024 quarter,
including US$7M at the Hermosa project (noted above, all capitalised), US$3M
for our Sierra Gorda EAI (all capitalised) and US$2M for our manganese EAI
(nil capitalised).
PRODUCTION SUMMARY
Production guidance (South32 share)
FY24 YTD FY25 FY25e((a)) %((b)) Comments
Worsley Alumina
Alumina production (kt) 3,777 850 3,750 23% Planned calciner maintenance in Q1 FY25
Brazil Alumina (non-operated)
Alumina production (kt) 1,286 334 1,350 25%
Brazil Aluminium (non-operated)
Aluminium production (kt) 104 30 130 23% Smelter continues to ramp-up in accordance with guidance
Hillside Aluminium(13)
Aluminium production (kt) 720 180 720 25%
Mozal Aluminium(13)
Aluminium production (kt) 314 88 360 24%
Sierra Gorda (non-operated)
Payable copper equivalent production (kt)(3) 73.5 22.1 84.8 26%
Payable copper production (kt) 60.8 17.6 70.0 25%
Payable molybdenum production (kt) 0.9 0.4 1.3 31%
Payable gold production (koz) 24.6 7.7 25.0 31%
Payable silver production (koz) 607 151 550 27%
Cannington
Payable zinc equivalent production (kt)(4) 302.5 50.7 265.4 19% Challenging ground conditions in Q1 FY25
Higher metal grades and throughput expected across the remainder of FY25
Payable silver production (koz) 12,666 1,915 11,300 17%
Payable lead production (kt) 112.4 19.3 100.0 19%
Payable zinc production (kt) 60.7 12.1 50.0 24%
Cerro Matoso
Payable nickel production (kt) 40.6 8.6 35.0 25%
Australia Manganese
Manganese ore production (kwmt) 2,324 - 1,000 N/A On track to resume production in Q2 FY25
South Africa Manganese
Manganese ore production (kwmt) 2,175 597 2,000 30%
Illawarra Metallurgical Coal(14)
Total coal production (kt) 4,938 766 N/A N/A Results represent ownership period July to August 2024
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 YTD FY25
compared to current FY25e.
s
WORSLEY ALUMINA (86% SHARE)
South32 share YTD FY24 YTD FY25 YoY 1Q24 4Q24 1Q25 1Q25 1Q25
vs vs
1Q24 4Q24
Alumina production (kt) 972 850 (13%) 972 916 850 (13%) (7%)
Alumina sales (kt) 913 824 (10%) 913 974 824 (10%) (15%)
Worsley Alumina saleable production decreased by 7% (or 66kt) to 850kt in the
September 2024 quarter as planned calciner maintenance was undertaken, and we
managed constrained bauxite supply due to delayed approvals for new mining
areas. FY25 production guidance remains unchanged at 3,750kt with the refinery
to convert excess hydrate stocks to calcined alumina across the remainder of
the year.
Sales decreased by 15% in the September 2024 quarter due to lower product
availability and the timing of shipments. We realised a circa 8% discount to
the Platts Alumina index(15) on a volume weighted M-1 basis for alumina sales
in the September 2024 quarter, which reflected market based prices with the
exception of a legacy supply contract with Mozal Aluminium which is linked to
the LME aluminium price.
On 8 July 2024, the Western Australian Environmental Protection Authority (WA
EPA) published its recommendation that the Worsley Mine Development Project
(the Project) be approved, subject to conditions. If imposed in their current
form, several conditions would create significant operating challenges. We
have lodged an appeal in relation to the WA EPA assessment report.
On 15 October 2024, the Western Australian State Government announced that it
would defer regulation of greenhouse gas emissions to the Federal Government's
Safeguard Mechanism. The change will remove policy inconsistencies that
currently exist between the State and Federal Government with regard to
greenhouse gas emissions, and is expected to be addressed as part of the
appeals process for the Project.
We continue to work collaboratively with the Western Australian Government to
enable Worsley Alumina to continue to meet the State's robust environmental
standards. The Western Australian Environment Minister is expected to consider
approval of the Project in December 2024, with required Federal approvals
expected shortly thereafter.
BRAZIL ALUMINA (36% SHARE, NON-OPERATED)
South32 share YTD FY24 YTD FY25 YoY 1Q24 4Q24 1Q25 1Q25 1Q25
vs vs
1Q24 4Q24
Alumina production (kt) 318 334 5% 318 333 334 5% 0%
Alumina sales (kt) 272 326 20% 272 358 326 20% (9%)
Brazil Alumina saleable production was largely unchanged at 334kt in the
September 2024 quarter as the refinery continued to benefit from improved
plant availability. FY25 production guidance remains unchanged at 1,350kt.
A preliminary environmental license for MRN's West Zone project, which has the
potential to extend the life of the bauxite mine by more than 20 years(16),
was issued during the September 2024 quarter. A final investment decision for
an enabling transmission line to connect MRN to the Brazilian power grid is
expected during the December 2024 quarter.
BRAZIL ALUMINIUM (40% SHARE, NON-OPERATED)
South32 share YTD FY24 YTD FY25 YoY 1Q24 4Q24 1Q25 1Q25 1Q25
vs vs
1Q24 4Q24
Aluminium production (kt) 24 30 25% 24 28 30 25% 7%
Aluminium sales (kt) 8 25 213% 8 30 25 213% (17%)
Brazil Aluminium saleable production increased by 7% (or 2kt) to 30kt in the
September 2024 quarter as the smelter continued to ramp-up all three potlines.
FY25 production guidance remains unchanged at 130kt.
HILLSIDE ALUMINIUM (100% SHARE)
South32 share YTD FY24 YTD FY25 YoY 1Q24 4Q24 1Q25 1Q25 1Q25
vs vs
1Q24 4Q24
Aluminium production (kt) 180 180 0% 180 180 180 0% 0%
Aluminium sales (kt) 170 175 3% 170 184 175 3% (5%)
Hillside Aluminium saleable production was unchanged at 180kt in the September
2024 quarter as the smelter continued to test its maximum technical capacity,
despite the impact of load-shedding. FY25 production guidance remains
unchanged at 720kt(13).
MOZAL ALUMINIUM (63.7% SHARE)
South32 share YTD FY24 YTD FY25 YoY 1Q24 4Q24 1Q25 1Q25 1Q25
vs vs
1Q24 4Q24
Aluminium production (kt) 84 88 5% 84 77 88 5% 14%
Aluminium sales (kt) 77 86 12% 77 101 86 12% (15%)
Mozal Aluminium saleable production increased by 14% (or 11kt) to 88kt in the
September 2024 quarter as the smelter achieved improved process stability
following completion of its operational recovery plan, despite the impact of
load-shedding. FY25 production guidance remains unchanged at 360kt(13).
The smelter sources all of its alumina from our Worsley Alumina refinery with
approximately 50% priced as a percentage of the LME aluminium index under a
legacy contract and the remainder linked to the Platts Alumina index on a M-1
basis, with caps and floors that reset every calendar year. As a result, the
smelter's cost of alumina was at a discount to the index in the September 2024
quarter.
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 YTD FY24 YTD FY25 YoY 1Q24 4Q24 1Q25 1Q25 1Q25
vs vs
1Q24 4Q24
Payable copper equivalent production (kt)(3) 20.1 22.1 10% 20.1 18.4 22.1 10% 20%
Payable copper production (kt) 16.0 17.6 10% 16.0 15.3 17.6 10% 15%
Payable copper sales (kt) 15.3 17.9 17% 15.3 15.3 17.9 17% 17%
Sierra Gorda payable copper equivalent production(3) increased by 20% (or
3.7kt) to 22.1kt in the September 2024 quarter 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).
A feasibility study and final investment decision by the joint venture
partners for the fourth grinding line expansion is now expected in the second
half of calendar year 2025, to enable additional detailed engineering and
study work on the tailings thickeners to be completed.
CANNINGTON (100% SHARE)
South32 share YTD FY24 YTD FY25 YoY 1Q24 4Q24 1Q25 1Q25 1Q25
vs vs
1Q24 4Q24
Payable zinc equivalent production (kt)(4) 74.7 50.7 (32%) 74.7 77.3 50.7 (32%) (34%)
Payable silver production (koz) 3,230 1,915 (41%) 3,230 3,065 1,915 (41%) (38%)
Payable silver sales (koz) 2,873 2,342 (18%) 2,873 3,054 2,342 (18%) (23%)
Payable lead production (kt) 28.5 19.3 (32%) 28.5 28.8 19.3 (32%) (33%)
Payable lead sales (kt) 25.6 25.1 (2%) 25.6 27.9 25.1 (2%) (10%)
Payable zinc production (kt) 13.2 12.1 (8%) 13.2 17.4 12.1 (8%) (30%)
Payable zinc sales (kt) 13.9 12.6 (9%) 13.9 20.2 12.6 (9%) (38%)
Cannington payable zinc equivalent production(4) decreased by 34% (or 26.6kt)
to 50.7kt in the September 2024 quarter, as the operation managed increased
underground activity and complexity which is expected to continue to drive
variability in quarterly performance.
Ore mined decreased by 24% during the September 2024 quarter as additional
dewatering and ground rehabilitation was required to access stoping fronts.
Average metal grades also declined as the processing of a higher grade stope
was deferred to the December 2024 quarter.
FY25 production guidance remains unchanged at 265.4kt payable zinc equivalent
(silver 11,300koz, lead 100.0kt, zinc 50.0kt), with dewatering completed in
the September 2024 quarter expected to benefit underground performance and
access to higher grade stopes across the remainder of the year.
CERRO MATOSO (99.9% SHARE)
South32 share YTD FY24 YTD FY25 YoY 1Q24 4Q24 1Q25 1Q25 1Q25
vs vs
1Q24 4Q24
Payable nickel production (kt) 8.3 8.6 4% 8.3 11.5 8.6 4% (25%)
Payable nickel sales (kt) 8.5 8.8 4% 8.5 12.1 8.8 4% (27%)
Cerro Matoso payable nickel production decreased by 25% (or 2.9kt) to 8.6kt in
the September 2024 quarter due to lower planned nickel grades. FY25 production
guidance remains unchanged at 35.0kt.
Sales decreased by 27% during the September 2024 quarter due to lower product
availability. The discount for our ferronickel product narrowed to ~14% to the
LME Nickel Index(17) (FY24: ~25% discount) in the September 2024 quarter,
reflecting tighter global supply of class two nickel.
We continued to progress our strategic review of Cerro Matoso and expect to
provide an update in the June 2025 half year.
AUSTRALIA MANGANESE (60% SHARE)
South32 share YTD FY24 YTD FY25 YoY 1Q24 4Q24 1Q25 1Q25 1Q25
vs vs
1Q24 4Q24
Manganese ore production (kwmt) 890 - N/A 890 - - N/A N/A
Manganese ore sales (kwmt) 940 - N/A 940 - - N/A N/A
Australia Manganese continued to implement the operational recovery plan
following the impacts of Tropical Cyclone Megan in the March 2024 quarter. We
progressed a substantial dewatering program and a phased mining restart during
the September 2024 quarter and remain on track to resume production from the
primary concentrator during the December 2024 quarter.
We also continued our investment in mine repairs and infrastructure, including
a critical bridge and the wharf. Wharf construction activity during the
September 2024 quarter prioritised stabilisation of existing infrastructure
and safe demolition of undersea structures.
FY25 production guidance remains unchanged at 1,000kwmt. Subject to
maintaining construction productivity during the upcoming wet season, sales
volumes are expected to progressively increase over the June 2025 quarter.
SOUTH AFRICA MANGANESE (ORE 54.6% SHARE)
South32 share YTD FY24 YTD FY25 YoY 1Q24 4Q24 1Q25 1Q25 1Q25
vs vs
1Q24 4Q24
Manganese ore production (kwmt) 628 597 (5%) 628 534 597 (5%) 12%
Manganese ore sales (kwmt) 518 590 14% 518 549 590 14% 7%
South Africa Manganese saleable production increased by 12% (or 63kwmt) to
597kwmt in the September 2024 quarter as the operation delivered strong mining
performance and continued to sell secondary products to maximise margins. We
will continue to optimise our product mix and use of higher cost trucking in
response to market conditions, with FY25 production guidance remaining
unchanged at 2,000kwmt. Planned maintenance is scheduled for the June 2025
half year.
NOTES
1. Upfront cash consideration 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 expected to be determined in the
December 2024 quarter.
2. Refers to aluminium produced in a process that results in less than 4t CO(2)-e
Scope 1 and Scope 2 GHG emissions per tonne of aluminium.
3. 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, Q1 FY25 and FY25e.
4. 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, Q1 FY25 and FY25e.
5. Refer to market release "US Department of Energy Grant for Clark Battery-Grade
Manganese" dated 20 September 2024.
6. Applicable for five years from the date of completion with no annual cap. The
first two years will be calculated and paid on the second anniversary of
completion and annually thereafter. The contingent price-linked consideration
will be calculated as 50% of incremental metallurgical coal revenue from
equity production, net of royalties, based on the following metallurgical coal
price thresholds: Year 1: US$200/t, Year 2: US$200/t, Year 3: US$190/t, Year
4: US$180/t, Year 5: US$180/t.
7. Upfront consideration of US$15M and completion adjustments of US$3M.
8. Subject to the Eagle Downs project reaching metallurgical coal production of
100,000 tonnes.
9. Price-linked royalty calculated based on potential future metallurgical coal
production and a metallurgical coal index price of at least US$170/t.
10. Net debt number is unaudited and should not be considered as an indication of
or alternative to an IFRS measure of profitability, financial performance or
liquidity.
11. 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.
12. Since inception, US$1.7B has been allocated to our on-market share buy-back
(796M shares at an average price of A$3.05 per share) and US$525M returned in
the form of special dividends.
13. Production guidance for Hillside Aluminium and Mozal Aluminium does not assume
any load-shedding impact on production.
14. Reflects the period from 1 July 2024 to completion of the Transaction.
15. 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$495/t in the September 2024 quarter.
16. The information in this announcement that refers to Production Target and
forecast financial information for MRN is based on Proved (8%) and Probable
(1%) Ore Reserves and Measured (91%) Mineral Resources. The Mineral Resources
and Ore Reserves underpinning the Production Target have been prepared by
Competent Persons in accordance with the requirement of the JORC Code and is
available to view in South32's 2024 Annual Report (www.south32.net) published
on 29 August 2024. South32 confirms that all material assumptions underpinning
the Production Target and forecast financial information derived from the
Production Target continues to apply and have not materially changed.
17. Our realised price for nickel sales during the September 2024 quarter was
US$6.34/lb, which represented a ~14% discount to the average LME Nickel Index
price of US$7.37/lb.
18. Illawarra Metallurgical Coal sales are adjusted for moisture and will not
reconcile directly to Illawarra Metallurgical Coal production.
The following abbreviations have been used throughout this report: US$ 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 YTD FY24 YTD FY25 1Q24 2Q24 3Q24 4Q24 1Q25
Worsley Alumina (86% share)
Alumina hydrate production (kt) 973 932 973 961 926 919 932
Alumina production (kt) 972 850 972 962 927 916 850
Alumina sales (kt) 913 824 913 985 895 974 824
Brazil Alumina (36% share)
Alumina production (kt) 318 334 318 322 313 333 334
Alumina sales (kt) 272 326 272 375 277 358 326
Brazil Aluminium (40% share)
Aluminium production (kt) 24 30 24 26 26 28 30
Aluminium sales (kt) 8 25 8 32 32 30 25
Hillside Aluminium (100% share)
Aluminium production (kt) 180 180 180 179 181 180 180
Aluminium sales (kt) 170 175 170 157 209 184 175
Mozal Aluminium (63.7% share)
Aluminium production (kt) 84 88 84 82 71 77 88
Aluminium sales (kt) 77 86 77 90 58 101 86
Sierra Gorda (45% share)
Ore mined (Mt) 5.9 6.4 5.9 6.0 3.1 4.9 6.4
Ore processed (Mt) 5.5 5.6 5.5 5.4 5.5 5.5 5.6
Copper ore grade processed (%, Cu) 0.37 0.41 0.37 0.38 0.34 0.37 0.41
Payable copper equivalent production (kt)(3) 20.1 22.1 20.1 18.3 16.7 18.4 22.1
Payable copper production (kt) 16.0 17.6 16.0 15.6 13.9 15.3 17.6
Payable copper sales (kt) 15.3 17.9 15.3 17.2 13.1 15.3 17.9
Payable molybdenum production (kt) 0.4 0.4 0.4 0.1 0.2 0.2 0.4
Payable molybdenum sales (kt) 0.4 0.2 0.4 0.3 0.4 0.2 0.2
Payable gold production (koz) 6.3 7.7 6.3 7.1 5.3 5.9 7.7
Payable gold sales (koz) 6.3 7.8 6.3 7.5 5.2 5.9 7.8
Payable silver production (koz) 145 151 145 150 153 159 151
Payable silver sales (koz) 140 157 140 160 141 164 157
Cannington (100% share)
Ore mined (kwmt) 551 438 551 599 529 573 438
Ore processed (kdmt) 562 440 562 577 525 557 440
Silver ore grade processed (g/t, Ag) 206 163 206 216 200 199 163
Lead ore grade processed (%, Pb) 5.8 5.1 5.8 6.2 5.6 5.9 5.1
Zinc ore grade processed (%, Zn) 3.2 3.7 3.2 3.6 3.8 4.1 3.7
Payable zinc equivalent production (kt)(4) 74.7 50.7 74.7 81.6 68.8 77.3 50.7
Payable silver production (koz) 3,230 1,915 3,230 3,474 2,897 3,065 1,915
Payable silver sales (koz) 2,873 2,342 2,873 3,656 2,210 3,054 2,342
Payable lead production (kt) 28.5 19.3 28.5 30.3 24.8 28.8 19.3
Payable lead sales (kt) 25.6 25.1 25.6 31.0 17.9 27.9 25.1
Payable zinc production (kt) 13.2 12.1 13.2 15.8 14.3 17.4 12.1
Payable zinc sales (kt) 13.9 12.6 13.9 14.4 11.6 20.2 12.6
Cerro Matoso (99.9% share)
Ore mined (kwmt) 940 1,338 940 1,243 1,486 1,526 1,338
Ore processed (kdmt) 594 664 594 723 711 746 664
Ore grade processed (%, Ni) 1.57 1.46 1.57 1.53 1.61 1.70 1.46
Payable nickel production (kt) 8.3 8.6 8.3 10.0 10.8 11.5 8.6
Payable nickel sales (kt) 8.5 8.8 8.5 9.5 10.8 12.1 8.8
Australia Manganese (60% share)
Manganese ore production (kwmt) 890 - 890 789 645 - -
Manganese ore sales (kwmt) 940 - 940 924 709 - -
Ore grade sold (%, Mn) 42.9 - 42.9 42.2 42.2 - -
South Africa Manganese (54.6% share)
Manganese ore production (kwmt) 628 597 628 483 530 534 597
Manganese ore sales (kwmt) 518 590 518 564 485 549 590
Ore grade sold (%, Mn) 39.0 38.9 39.0 38.4 38.7 39.1 38.9
Illawarra Metallurgical Coal (100% share)(14)
Total coal production (kt) 1,168 766 1,168 877 1,405 1,488 766
Total coal sales (kt)(18) 1,196 540 1,196 900 1,238 1,537 540
Metallurgical coal production (kt) 1,043 676 1,043 744 1,244 1,274 676
Metallurgical coal sales (kt) 996 507 996 763 1,053 1,360 507
Energy coal production (kt) 125 90 125 133 161 214 90
Energy coal sales (kt) 200 33 200 137 185 177 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
21 October 2024
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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