PERTH (miningweekly.com) – Diversified miner South32 has increased its manganese production guidance from its Australian and South African operations to take advantage of favourable market conditions.

The company increased its production guidance at the Australia manganese operations by 6% to 3.30-million tonnes and its South African manganese operations by 5% to 2.15-million tonnes.

This follows a record operating performance at the Australian operations during the March 2018 quarter, when saleable ore increased by 15% quarter-on-quarter to 830-million tonnes. The nine-month performance is also 14% ahead of the same period of the 2017 financial year, with output increasing to 2.53-million tonnes.

Manganese saleable ore production from the South African operations, in the Northern Cape, decreased by 5% quarter-on-quarter to 539-million tonnes in the third quarter, although the nine-month output is up 11% to 1.67-million tonnes.

South32 said that it increased its 2018 financial year guidance despite planned major maintenance as the Wessels underground mine in the June 2018 quarter.

The mining company also reported a production record at its Mozal aluminium operation, in Mozambique, delivering a record 204 000 t of product in the nine months to March, and  delivering 67 000 t during the third quarter.

South32 told shareholders that the smelter continued to test its maximum technical capability, driving increased production.

Alumina production for the nine month period was reported at 3.7-million tonnes, with the March quarter contributing 1.28-million tonnes. This was in line with the 1.26-million tonnes produced in the previous quarter.

Total aluminium production for the same nine-month period was reported at 737 000 t, with the March quarter contributing 245 000 t, which was slightly below the 246 000 t produced in the December quarter.

The Mozal aluminium operation delivered a record 204 000 t of product in the nine months to March, delivering 67 000 t during the third quarter. South32 told shareholders that the smelter continued to test its maximum technical capability, driving increased production.

The South African aluminium operation contributed 533 000 t of production during the nine-month period, while the Brazilian operations contributed 990 000 t, of which 175 000 t was produced in the third quarter.

Alumina production for the nine-month period was reported at 3.77-million tonnes, with the March quarter contributing 1.283-million tonnes. This was in line with the 1.26-million tonnes produced in the previous quarter.

Worsley Alumina, in Australia, produced 2.78-million tonnes in the nine months and 918 000 t in the third quarter. Brazil Alumina’s saleable production decreased to 990 000 t in the nine months, with 314 000 t produced in the third quarter.

MET COAL GUIDANCE LOWERED

Meanwhile, South32 lowered its production guidance for its Illawarra metallurgical coal operation, in Australia’s New South Wales coalfields, by 9% to 4.10-million tonnes, as the company continued rehabilitation activities at the Appin colliery, which is recovering from an extended outage.

Metallurgical coal production for the nine months under review declined by 51% compared with the previous corresponding period, as production from both the Australian and South African operations decreased to 2.08-million tonnes. Third-quarter output decreased by 45% to 794 000 t.

Metallurgical coal production for the nine months to March reached just over two-million tonnes, with 1.43-million tonnes produced in the March quarter.

Energy coal production was also down 7% in the year-to-date, to over 21-million tonnes, with 6.8-million tonnes delivered in the three months to March.

“At the Appin colliery, we further prioritized coal clearance and ground rehabilitation activities during the quarter, setting the foundation for a return to historical rates of production at Illawarra metallurgical coal … of more than eight-million tonnes a year,” said South32 CEO Graham Kerr.

The miner aims to return to six-million tonnes a year of production in the 2019 financial year and to eight-million tonnes a year in the 2020 financial year.

The Illawarra operations produced 933-million tonnes of energy coal in the year-to-date period, a 13% decrease on the same period of the previous financial year, but third quarter output jumped 94% to 355-million tonnes, from 183-million tonnes in the third quarter of 2017.

South African Energy Coal production was down 6% in the year-to-date, to over 21.16-million tonnes, with 6.74-million tonnes delivered in the three months to March. The third-quarter performance was in line with the previous and corresponding quarter periods.

Kerr said that South32 continued to advance plans to manage South Africa Energy Coal as a standalone business from the June 2018 quarter in a move aimed at lowering overhead costs and simplifying the business.

Further, the miner reported that manganese production in the nine months to March reached 180 000 t, an 11% increase on the previous corresponding period, with 47 000 t of manganese alloy produced during the March quarter.

Kerr reported that saleable ore production from the Australian manganese operations increased by 14% to a record 2.5-million tonnes in the nine-month period, as the PC02 circuit exceeded its annual capacity.

The South African manganese operations also increased ore production by 11% during the same period, to 1.7-million tonnes.

In addition, silver production during the nine months was down 33% on the previous corresponding period, to 8.26-million ounces, with 3.085-million ounces produced in the March quarter, while lead production was down 31% in the year-to-date, to 73 000 t, with 23 600 t produced in the March quarter, while zinc production was down 50% to 28 800 t, with 8 600 t produced in the last three months.

“We also continued to benefit from elevated prices in our key commodity markets, strengthening our net cash balance by $477-million to $1.9-billion after allocating a further $85-million to our on-market share buy-back,” Kerr said.