JOHANNESBURG (miningweekly.com) – Being a premier base metals-focused business with strong growth potential is the vision for South32 of new CEO Matt Daley.

“We've got around 55% production growth over the next handful of years in the commodities that we particularly feel are strongly structurally positioned for really strong years ahead, those being zinc, lead, silver, and copper,” said an upbeat Daley who spoke to Mining Weekly after taking over the reins of South32 from outgoing Graham Kerr on July 1.

Daley had a hyperactive first day in office amid the company’s major aluminium asset disposal announcement as well as a copper growth announcement.

“Exciting time today and pretty honoured to step into the role of CEO,” Daley commented amid Alcoa agreeing to buy South32’s aluminium value chain assets for up to $5.6-billion and South32 highlighting its participation in the Sierra Gorda copper growth project in northern Chile.

“The strategy for us is really clear, and we've been articulating it today around running what is going to be a premier base metals-focused business with really strong growth potential,” Daley reiterated.

The ASX-, LSE- and JSE-listed South32's targeted 55% base metals uplift involves optimising existing assets and pursuing high-margin developments in Tier 1 jurisdictions.

“We've got a portfolio that spans Australia, South America, North America, with exploration everywhere from Chile to Southern Africa and back to Australia.

“With the Alcoa transaction, we crystallise one of those future cash flows from the aluminium value chain right here and now and pick up some of the synergies that exist in the southwest between the neighbouring Alcoa and South32 refineries and position us really well to invest in those growth base metals projects.

“My big focus is around strategic planning and operational excellence, and that goes hand in hand with safety performance for me as well. So, excited to step into the role, and I think some great days ahead for the company.”

Questioned on manganese, Daley clarified that manganese is not an area of growth for South32.

What is positive for manganese is that South Africa’s Wessels and Mamatwan manganese mines are performing to plan this year but higher diesel prices are impacting movement of material by road. “We’re certainly working through some of those challenges and we've had quite a good year on rail again,” said Daley, who regularly visited South Africa when working for Anglo American. “I was there almost every month and deeply love the place and the people.”

Exceptionally high rainfalls and cyclones have dealt a significant blow to South32’s manganese operation in Australia’s Northern Territory.

“The site's really focused on managing water at the moment, which has had an impact on production, and we reguided the market at the end of Q3 around that reduction as a result of the water.”

On capital investment prospects for manganese, Daley said: “Manganese is not an area of growth for South32 so we're really investing growth capex into our zinc and copper businesses, so that's kind of the focus, but for us running the manganese business on plan is really important, as well as ensuring it's safe and stable.”

The combined manganese output from South32’s South African and Australian operations was 1.09-million tons in the March quarter, up from 476 000 t a year earlier.

South32’s South African manganese mines are found in the manganese-rich Kalahari basin, in the Northern Cape, which is home to 80% of the world's manganese orebody.

Its two mines are part of the Hotazel Manganese Mines consortium, in which it holds a 44.4 % interest.

The Wessels mine has vertical and incline shafts and uses the mechanised bord and pillar mining method, while Mamatwan deploys the terrace mining method.

Manganese is an important alloy that is used to improve the quality and strength of steel or aluminium.