South32 remains committed to base metals

27th October 2022

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia


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PERTH ( – Despite the softening in base metal prices, diversified miner South32 has maintained its outlook for these commodities over the longer term.

Speaking on a call following the company’s annual general meeting (AGM), CEO Graham Kerr said in the medium- to longer-term, commodities such as copper, nickel, zinc and silver would continue to play an important role in decarbonising the world.

“That demand is going to be super strong, and the reality is that supply over the last five or six years has been shrinking, and there has been a severe lack in investment and exploration. So we will be seeing stronger prices in the long-term, which will make the industry very attractive.”

Speaking to South32’s outlook on further acquisitions in the base metals sector, Kerr noted that valuable acquisition opportunities were not plentiful, and that competition for these assets was significant.

Kerr said that while the company maintained that it would grow the organisation in terms of returns for shareholders, there was no dire need to add to its portfolio, given the nature of its existing asset base. However, he said that the company would continue to “watch and look” for opportunities.

Speaking to shareholders at the AGM, Kerr said that over the past seven years, South32 had transformed its portfolio to focus on increasing its exposure to the commodities critical to a low-carbon future, and that transformation continued in the 2022 financial year.

“We acquired immediate exposure to copper, through our 45% stake in Chile’s Sierra Gorda copper mine. We grew our exposure to low-carbon aluminium through our increased shareholding in the hydro-powered Mozal Aluminium smelter in Mozambique, and participated in the restart of the 100%-renewable-powered Brazil Aluminium smelter.

“Through these investments, we expect to double our share of low-carbon aluminium production capacity,” Kerr said.

He noted that in August, the company also announced the decision not to proceed with an investment in the Dendrobium Next Domain project at Illawarra Metallurgical Coal in Australia.

“The decision followed consideration of recently completed study work and extensive analysis of alternatives considered for the complex. Through this work, we determined that the expected returns from the up-front capital expenditure did not justify an investment relative to the alternatives considered for the complex, and so we decided not to proceed with the project.

“We will now focus on continuing to optimise Dendrobium and the broader Illawarra Metallurgical Coal complex to extend the mine life within approved domains. This decision increases our capacity to direct capital towards other opportunities, including our world class development options in North America that have the potential to underpin a significant growth profile to produce commodities critical to a low-carbon future.”

Looking ahead, Kerr said that South32 would continue to focus on cost management and expected to see the benefit of production growth in the next financial year which the company anticipated would help to mitigate industry-wide cost inflation.

Edited by Creamer Media Reporter



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