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South32 records one of its highest profits to date

South32 results presentation covered by Mining Weekly’s Martin Creamer. Audio: Darlene Creamer.

16th February 2023

By: Martin Creamer

Creamer Media Editor

     

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JOHANNESBURG (miningweekly.com) – Diversified mining company South32 recorded one of its highest profits to date with half-year earnings of $1.36-billion, underpinned by production growth of 12%.

Increased exposure to the metals critical to a low-carbon future, and continued focus on cost efficiencies enabled the Sydney-, Johannesburg- and London-listed company to pay an ordinary dividend of $224-million. (Also listen to attached Creamer Media audio.)

“Commodity markets have strengthened, leaving us well placed to capitalise on planned production growth and lower operating unit costs expected across the majority of our operations in the second half of the 2023 financial year,” South32 CEO Graham Kerr stated in a release to Mining Weekly.

“The long-term outlook for our business is positive as a result of our portfolio investments and high-quality development options in the metals critical for a low-carbon future,” Kerr added.

South Africa Manganese half-year production rose 4% to 1 093 000 wet metric tonnes (wmt), and production guidance for the full year to end June remains unchanged at 2 000 000 wmt.

Half-year earnings before interest and tax (Ebit) increased 32% to $25-million, with capital expenditure (capex) expected to be $15-million in the 2023 financial year as South Africa Manganese replaces mobile fleet and equipment.  Accessing new mining areas and upgrading rail infrastructure will likely cost $18-million.

Hillside Aluminium Ebit fell 80% to $62-million on 1%-higher production to 362 000 t with elevated loadshedding not getting in the way of the smelter continuing to test its maximum technical capacity. Production guidance for the financial year is unchanged at 720 000 t.

Capex at Hillside for the financial year is expected to be at $30-million, with planned investment in a replacement trucking fleet for the transportation of liquid hot metal and the continued roll-out of the AP3XLE technology to improve energy efficiency. The technology has already been deployed at the company’s Mozal Aluminium smelter in Mozambique and reduces carbon intensity while providing volume and efficiency benefits.

Mozal’s half-year production rose 34% to 182 000 t with full-year production guidance remaining at 370 000 t.

Mozal’s half-year Ebit fell 41% to $65-million on a 10% decrease in the average realised price for aluminium and higher raw material input prices. Its pots were relined using AP3XLE.

Capex is expected to be $19-million for the year on plant refurbishment and continued AP3XLE implementation.

SOUTH32 LEAD TEAM CHANGES

Changes to South32’s lead team will take effect on 1 April.

Katie Tovich, after almost four years as South32’s CFO, will be appointed to the role of chief human resources and commercial officer.

With this change, finance VP Sandy Sibenaler will be appointed CFO.

South32 produces bauxite, alumina, aluminium, copper, silver, lead, zinc, nickel, metallurgical coal and manganese from operations in Australia, Southern Africa and South America.

Edited by Creamer Media Reporter

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