South32 amends coal and metals output expectation

27th April 2017 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

South32 amends coal and metals output expectation

South32 CEO Graham Kerr

PERTH ( – In addition to revising its full-year output guidance for the Cannington multi-metals mine, in Queensland, diversified spin-off South32 has also revised its full year production guidance for its South African energy coal operations.

Following a fire at the Cannington mine in April this year, South32 reduced its full-year production expectations at the mine from the previous guidance of 19-million ounces, to 16.5-million ounces of silver, while lead production is expected to decline form 163 000 t to 135 000 t, and zinc production from 80 000 t to 70 000 t.

At the South African energy coal operations, South32 has revised both its 2017 and 2018 production expectations following heavy rainfall and an associated delay in the development of new mining areas at the Wolvekrans-Middelburg Complex (WMC).

WMC is now expected to produce 30-million tonnes of coal in 2018, while the 2018 production will be reduced by a further 2.5-million tonnes to around 27.5-million tonnes.

Meanwhile, energy coal production for the three months to Mach was down 9%, to 6.8-million tonnes, as the South African coal operations were impacted by heavy rainfall in the March quarter.

Metallurgical coal production was up 3% during the quarter, to 1.4-million tonnes.

South32 has reported that alumina production during the quarter was down 2% on the previous quarter, to 1.2-million tonnes, while aluminium production was also down 2% to 245 000 t.

During the quarter under review, manganese ore production was up 3% to 1.2-million tonnes, while manganese alloy production was down 16%, to 47 000 t, while nickel production was up 1% to 9 100 t, silver production was down 12% to 3.5-million ounces and lead production was down 12% to 31 300 t. Zinc production for the three months to March was also down 38%, to 15 100 t.

“Despite several operational challenges during the quarter, we increased our net cash balance by $645-million to $1.5-billion,” CEO Graham Kerr said on Thursday.

“Having achieved the right balance of strength and flexibility, we announced a $500-million capital management programme and subsequently commenced an on-market share buy-back in April.”

Kerr said that consistent with the company’s strategy to identify new opportunities through the drill bit, South32 has also entered into a strategic alliance with AusQuest.

“Under this agreement, we will pursue five early stage base metal opportunities in Australia and Peru. We have also entered into an option agreement with Trilogy covering the more advanced Upper Kobuk mineral projects, in Alaska, and will initially test the extent of their high-grade Bornite copper resource.”