In its latest quarterly report, diversified miner South32 CEO Matt Daley says the group continued to deliver strong operating results, exceeding group production guidance for the financial year ended June 30.

“We increased quarterly sales volumes by 15%, capturing the benefit of strong market conditions across many of our commodities and releasing working capital which added to the group's cash generation,” he adds.

Additionally, he points out that the company, on July 1, announced a step change for the group, with the sale of its aluminium value chain business, including the Hillside smelter, in South Africa, to Alcoa Corporation.

Once complete, Daley says, this sale will unlock significant value for South32’s shareholders and reposition the group as a leading upstream base metals focused company.

He notes that South32’s portfolio will be built around high-margin, long-life assets in favourable jurisdictions, with about 85% of pro-forma earnings from base and precious metals and about 55% production growth from approved projects.

He adds that the company achieved significant milestones for its copper and zinc development projects during the June quarter.

At the Sierra Gorda mine, in Chile, the fourth grinding line project was approved for execution, which is expected to increase the company’s share of copper equivalent production by about 30% from financial year 2031.

At Hermosa, in the US, South32 continued construction of the Taylor zinc/lead/silver project and a final record of decision was received on July 7, completing the federal permitting process under the National Environmental Policy Act.

The company invested $34-million in its greenfield exploration opportunities during the 2026 financial year, progressing multiple exploration programmes targeting base metals in highly prospective regions.

The company invested $60-million in exploration programmes at its existing operations and development options in the 2026 financial year, including $30-million at its Hermosa project, $12-million for the Sierra Gorda and $5-million for the company’s manganese operations.

“Looking ahead, our focus on operational excellence, a strong balance sheet and transformational growth in base metals leaves us well positioned to deliver value for shareholders,” says Daley.

OPERATIONAL PERFORMANCE

At Sierra Gorda, in which South32 holds a 45% interest, payable copper equivalent production for the 2026 full-year was 87 100 t, exceeding guidance by 2%, despite lower grades in the fourth quarter, reflecting the processing of lower-grade material to supplement ore feed following weather-related impacts to mine access.

Financial year 2027 production guidance for the operation remains unchanged at 90 200 t.

Meanwhile, South32 says its wholly-owned Cannington operation, in Australia, had a strong finish to the year, delivering a 29% increase in quarterly production and exceeding full-year guidance by 2%.

Cannington’s payable zinc equivalent production was 205 400 t for the full-year, supported by an 11% increase in ore processed as lower-grade stockpiled material was milled.

Production increased by 29% quarter-on-quarter in the fourth quarter of the financial year, reflecting improved underground mining rates following weather-related disruptions in the third quarter and higher average metal grades.

The production guidance for the 2027 financial year remains unchanged at 204 700 t.

Zinc, lead and silver sales increased in the fourth quarter of financial year 2026 as third-party rail access was restored following weather-related outages in the prior quarter.

South32 continued to progress underground and openpit development studies to extend the mine life at Cannington. A final investment decision for the openpit development is targeted for the first half of the 2028 financial year.

Additionally, South32 says the Australia Manganese operations, in which it holds a 60% interest, continued to progress approvals, infrastructure investment and mine planning to manage elevated water volumes.

Saleable production for the 2026 financial year was 174% higher year-on-year at 3.03-million tonnes, in line with guidance. Production for the fourth quarter was also 33% higher quarter-on-quarter at 782 000 t.

South32 plans to provide a revised production guidance for the Australia Manganese operations for the 2027 financial year when it publishes its 2026 financial results.

The production guidance for the South Africa manganese operations, in which South32 holds 54.6% interest, for the 2027 financial year, meanwhile, remains unchanged at two-million tonnes.

South Africa Manganese’s saleable production for the 2026 financial year was 2.09-million tonnes, exceeding guidance by 4%. Production for the fourth quarter was 6% higher quarter-on-quarter, following planned maintenance in the third quarter of the financial year.

South32’s aluminium production for the 2026 financial year, meanwhile, exceeded guidance by 1%, while alumina production was in line with guidance.

Worsley Alumina produced 3.72-million tonnes of alumina for the 2026 financial year, while Brazil Alumina produced 1.41-million tonnes.

Brazil Aluminium produced 144 000 t of aluminium for the 2026 financial year, while Mozal Aluminium, in Mozambique, produced 248 000 t, and Hillside Aluminium, 717 000 t.

Mozal Aluminium has been placed on care and maintenance and is not part of the assets being sold to Alcoa.

CORPORATE UPDATE

South32 notes that group sales volumes increased by 15% in the fourth quarter of the 2026 financial year, as the company sold final inventories at Mozal Aluminium and third-party rail access was restored at Cannington, following weather-related outages in the third quarter of the financial year.

The company says it expects to record a working capital unwind of about $200-million in the second half of the financial year, reflecting a drawdown of inventories.

Group and unallocated expense in underlying earnings before interest and taxes for the financial year is expected to be about $60-million, primarily reflecting favourable inter-group inventory adjustments in the aluminium value chain.