PERTH (miningweekly.com) – Triple-listed diversified miner South32 has reported production records at four of its operations during its first quarter of production since its break from major BHP Billiton.
However, the miner has warned of a $1.9-billion asset impairment on its Australian and South African manganese smelters, as well as its Wolwekrans Middelburg Complex, within the South African energy coal division.
The miner said the cumulative noncash impairment of $1.3-billion on its manganese assets was largely offset by the previous fair value uplift of $2.1-billion described in its listing documents.
South32 made its market debut in May, after BHP shareholders agreed to the divestment of South32, which comprises the aluminium, coal, manganese, nickel and silver assets previously held in the BHP portfolio.
“This was an historic period for our company as shareholders approved the demerger and we listed on the ASX, LSE and JSE,” said South32 CEO Graham Kerr.
During the three months ended June, production records were set at the Brazil aluminium operations, the Illawarra coal project, in Australia, as well as at the manganese operations in Australia and South Africa.
The group’s alumina production increased by 1% quarter-on-quarter to 1.2-million tonnes, while aluminium production was down 1% to 242 000 t.
The Brazil aluminium operation produced 337 000 t of alumina and 330 000 t of aluminium for the quarter, an 8% and 16% respective increase on the previous quarter.
The Worsley alumina operation produced 929 000 t of alumina during the quarter, down 1% on the previous quarter.
Aluminium production at the Hillside and Mozal refineries was broadly unchanged during the quarter, as efficiency gains offset a significant increase in load-shedding events during the year.
The South African aluminium operations produced 175 000 t during the quarter, while the Mozal plant delivered 65 000 t.
Manganese production increased by 3% during the quarter to 1.12-million tonnes, with 81 000 t of manganese alloys produced, a 26% decline on the previous quarter.
South32 said on Wednesday that the company had responded to challenging market conditions by temporarily suspending capacity at its Metalloys plant and prioritising higher-value manganese ore production.
The South African Metalloys operation was also affected by a fatality during the quarter, which led to the initial suspension of operations, before a decision was taken to restart only one of the four furnaces in response to market conditions.
“We are fast-tracking the implementation of our regional operating model and have established a strong foundation for our agile and entrepreneurial culture. The curtailment of aluminium production at Alumar and manganese alloy production at Metalloys demonstrates our commitment to maximise financial performance per share, rather than volume,” Kerr said.
Meanwhile, metallurgical coal production increased by 23% quarter-on-quarter to 1.9-million tonnes, while energy coal production reached 8.5-million tonnes in the June quarter.