South32 coal production falls sharply

The Illawarra metallurgical coal mine in Australia

The Illawarra metallurgical coal mine in Australia

22nd January 2024

By: Mariaan Webb

Creamer Media Senior Deputy Editor Online


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Diversified mining company South32 on Monday reported a sharp drop in coal production, with metallurgical coal output slumping by 50% in the December quarter.

The Illawarra mine, in Australia, produced 744 000 t in the three months ended December, compared with 1.48-million tonnes in the comparative quarter.

For the first half of the 2024 financial year, Illawarra’s metallurgical coal production fell by 39% to 1.78-million tonnes, as the operation completed two planned longwall moves, including an extended outage at the Dendrobium mine.

Energy coal production fell by 47% in the December quarter to 133 000 t, while half-year energy output was 55% down to 258 000 t.

Total half-year coal output came to 2.05-million tonnes and South32 said it still expected Illawarra to produce about five-million tonnes in 2024.

South32’s Australia manganese production also fell by 17% year-on-year in the December quarter to 789 000 t, while half-year production came to 1.68-million tonnes. South African manganese ore production fell by 9% in the December quarter to 483 00 t and half-year production increased to 1.11-million tonnes.

Zinc-equivalent production at Cannington, in Australia, increased by 13% year-on-year to 147 200 t. The December quarter’s production was 10% higher than that of the December 2023 quarter at 70 300 t.

Cerro Matoso, in Chile, reported a 10% year-on-year decrease in half-year production to 20 400 t. The company has started a strategic review of the operation to “evaluate options to enhance its competitive position”.

The Chile-based Sierra Gorda mine’s payable copper-equivalent production reduced by 14% to 38 600 t in the six months. Copper production was 17% lower at 31 600 t, as the higher throughput delivered by the plant debottlenecking project was more than offset by lower planned grades.

South32 has reduced the full-year guidance for the molybdenum production from Sierra Gorda, following an unplanned outage of the molybdenum plant in the December quarter.

South32 has disclosed a downward adjustment of 3% in its full-year production forecast but expressed optimism regarding cost expectations amid a concerted group-wide effort focusing on cost-cutting measures.

“With some of our commodities facing headwinds in the half, we continued to focus on delivering cost efficiencies and expect first-half operating unit costs to be below or in line with guidance for the majority of our operations,” said CEO Graham Kerr.

The miner lowered its group copper-equivalent production guidance to reflect a revised guidance for its Brazil Alumina, Mozal Aluminium and molybdenum output from Sierra Gorda.

At the 36%-owned Brazil Alumina, the full-year guidance has been lowered by 7% to 1.26-million tonnes, owing to third-party power outages and maintenance.

South32’s first-half alumina production was 1% lower at 2.57-million tonnes, with Worsley Alumina, in Australia, producing 1.93-million tonnes and Brazil Alumina producing 640 000 t.

The guidance for Mozal Aluminium, in Mozambique, has been cut by 12% to 345 000 t, as the operation continues to implement a recovery plan following a 2022 fatal accident.

However, despite the Mozal setbacks, South32 delivered a record aluminium result for the first half of the 2024 financial year, helped by its Hillside Aluminium operation, in South Africa.

Group aluminium production was 1% higher at 575 000 t, with Hillside Aluminium, in South Africa, delivering 359 000 t and Mozal producing 166 000 t.  

Further, South32 kept its full-year guidance for its copper, zinc, nickel, metallurgical coal and manganese operations unchanged, despite a drop in production for several of these commodities.

Production for the year would be weighted to the June 2024 half.

Edited by Creamer Media Reporter



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