South32 keeps its pace

21st October 2021 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

PERTH ( – Diversified miner South32 has maintained its production guidance for its 2022 financial year, following a strong first quarter.

The miner on Thursday reported a 10% decline in alumina production, compared with the fourth quarter of the 2021 financial year, reaching 1.2-million tonnes, while aluminium production increased by 1% to 248 000 t.

Alumina production from the Brazil operations reduced by 22% in the quarter following an incident in July that damaged one of the two bauxite unloaders at the refinery. The operation took immediate action to mitigate the disruption through the installation of temporary loading infrastructure and returned to full capacity in October.

Metallurgical coal production for the three months to September increased by 18% on the previous quarter, to 1.5-million tonnes, while energy coal production declined by 19%, to 313 000 t.

The increase in metallurgical coal production was ascribed to longwall productivity improvements at the Illawarra operation, following challenging strata conditions and a longwall move in the prior period.

Meanwhile, manganese production in the quarter increased by 7% on the June quarter, to 1.5-million tonnes, as production from the South Africa manganese operations hit a record owing to higher volumes of premium material from the Mamatwan mine.

“Our operations continue to perform well, achieving record production at South Africa Manganese and maintaining production above nameplate capacity at Worsley Alumina. Production at Mozal Aluminium was higher, with the smelter benefitting from our investment in the AP3XLE energy efficiency technology,” said CEO Graham Kerr on Thursday.

“Our teams continue to achieve strong operating results, despite the ongoing challenges of Covid-19 across the globe.”

Nickel production in the quarter declined by 12%, to 9 600 t, while silver production declined by 16%, to 3.40-million ounces, lead production declined by 23% to 31 900 t and zinc production declined by 21%, to 15 400 t.

Operations at the Cerra Matoso nickel project were impacted by an unplanned transformer outage, while operations at the Cannington project were impacted by planned surface maintanence, which lowered plant throughput. Average grade declines also impacted the project, following the prior period’s extraction of a higher grade mining sequence.

“Our operating performance has further strengthened our financial position, supporting the continuation of our on-market share buy-back, and subsequent to the end of the period, payment of our $256-million fully franked ordinary and special dividends in respect of the June 2021 half-year,” Kerr said on Thursday.

“We continue to actively reshape our portfolio for a low carbon future, and last week entered into binding conditional agreements to acquire a 45% interest in Sierra Gorda, a long life, openpit copper mine in Chile.

“We have also recently exercised our pre-emptive rights to acquire an additional interest in Mozal Aluminium. These initiatives, and our ongoing work . . . in Brazil to investigate the Alumar smelter’s potential restart using renewable power, will see us increase our leverage to the metals critical to the green energy transition.”

South32 is investigating a restart of the Alumar aluminium smelter in the second half of the 2022 financial year, using 100% renewable energy from 2024.

Alcoa this month already announced its plans to restart the 268 000 t/y smelter, which has been fully curtailed since 2015. The first molten metal is expected in the second quarter of 2022, and the full 268 000 t/y of capacity is expected to be operational in the fourth quarter of 2022. By 2024, the Alumar smelter will be powered with 100% renewable energy.

The cost of the restart is anticipated to be approximately $75-million, including approximately $10-million in capital expenses.

South32 expects to make a decision on the restart by the end of the calendar year.