South32 delivers solid Q2 results; announces leadership shuffle

17th January 2019

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia


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PERTH ( – Diversified miner South32 has reported a solid production performance in the December quarter, with the miner maintaining its production guidance for the full year to June 2019.

“We achieved a strong quarter of production, maintaining full-year guidance for all operations with the exception of Illawara metallurgical coal, where improved longwall performance has underpinned a 7% increase to our prior estimate,” South32 CEO Graham Kerr reported on Thursday.

Compared with the first quarter, metallurgical coal production during the second quarter was up 3%, to 1.56-million tonnes, while energy coal production was down 3% to 6.3-million tonnes.

South32 noted that South African energy coal’s export production was impacted by a dragline incident in August, while domestic production benefitted from the start of a contract to sell lower quality stockpiled product in the June quarter of 2018.

Kerr told shareholders on Thursday that the company’s plans to transform the ownership of the South African energy coal business remained on track, with binding bids expected before June this year.

Meanwhile, alumina production for the second quarter increased by 19%, to 1.3-million tonnes, while aluminium production remained stagnant at 247 000 t.

Alumina production from both the Worsley and Brazil alumina operations increased by 23% and 9% respectively, while aluminium production from the Hillside smelter remained stagnant and production from the Mozal smelter decreased by 1% on the previous quarter.

Manganese production for the quarter was down 1% on the previous quarter, to 1.4-million tonnes, while manganese alloy production was up by 10% over the same period to 57 000 t.

South32 reported record ore production at Australia manganese during the half-year ended December, as the primary circuit maintained high use rates, and the PC02 circuit operated at 120% of its design capacity.

Australia manganese produced 879 000 t of manganese ore during the quarter under review, and 35 000 t of manganese alloy, while half-year production reached 1.8-million tonnes of manganese ore and 76 000 t of manganese alloy.

The South African manganese operation for its part produced 560 000 t of manganese ore in the quarter under review, up 9% on the previous quarter, and 22 000 t of manganese alloy, up 100% on the previous quarter.

Meanwhile, South32 reported that nickel production for the quarter was down 3%, to 10 400 t, while silver production declined by 10%, to 2.8-million ounces, lead production was down 13% on the previous quarter to 22 500 t and zinc production was down 1%, to 13 100 t.

BMO Capital Markets, meanwhile, commented in a note that South32 remained well positioned to a strong 2019 financial year.

Meanwhile, South32 on Thursday also announced the appointment of Katie Tovich, who will succeed Brendan Harris as CFO from May 1. To ensure a smooth transition, Tovich will assume the role of deputy CFO immediately.

Harris will replace Peter Finnimore as chief marketing officer, assuming responsibility for the company’s commodity marketing and supply functions.

Harris will move to the marketing department from July 1.

“These appointments mark the culmination of a succession process that highlights the diverse talent within our organisation, while broadening the skills and experience of our leadership team,” Kerr said.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online


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