South32 CEO Graham Kerr
PERTH (miningweekly.com) – Diversified miner South32 has reported a strong finish to the 2019 financial year, with revenue equivalent production growing by 10% in the June quarter and by 3% in the full year, while record production was achieved at the Hillside aluminium operation, and metallurgical coal production from the Illawarra operation increased by 57%.
South32 CEO Graham Kerr on Thursday reported that alumina production for the full year had reached 5.05-million tonnes in the full year, down slightly from the 5.06-million tonnes reported at the end of the 2018 financial year.
Alumina production from the Brazil alumina operations declined by 4% during the year, to 1.2-million tonnes, as boiler performances and power outages impacted production.
Meanwhile, aluminium production remained stagnant at 982 000 t.
However, South32 reported that production from the Hillside aluminium operation reached a record 715 000 t in the full year, up from the 712 000 t in the previous financial year as the smelter continued to test its maximum technical capacity, and despite an increase in the frequency of load-shedding events.
Energy coal production for the full year was down by 7%, to 26.2-million tonnes, compared with the 28.3-million tonnes delivered in the 2018 financial year, as production from the South African energy coal division decreased on the back of extended outages of the Klipspruit dragline following an incident in August of last year.
The incident has been confirmed as an insurable event, and initial progress payment for the volume and cost impact of the outage was awarded during June, South32 told shareholders.
During the quarter ended June, South32 also received bids for its South African energy coal operation, with the miner saying that it was currently engaging with bidders to finalise these offers.
Once an acceptable agreement has been reached, a determination would be made regarding the reclassification of the operation as an asset held for sale on the balance sheet, and a discontinued operation in the income statement.
Meanwhile, South32 reported that metallurgical coal production for the full year was up by 69%, to 5.3-million tonnes, up from the 3.1-million tonnes in the previous corresponding period, as total coal production from the Illawarra metallurgical operation increased by 57%, to 6.6-million tonnes.
The Dendrrobium and Appil longwalls at the Illawarra metallurgical project continued to perform strongly following the successful completion of two longwall moves in the June quarter.
Manganese production was stagnant at 5.5-million tonnes, while nickel production was down by 6% in the full year, to 41 100 t, lead production was down by 3%, to 101 400 t, and zinc production was up by 25%, to 51 600 t.
“We also continued to benefit from strong prices for our core commodities during the year, distributing $657-million in dividends to shareholders and allocating $281-million to our on-market buy-back,” Kerr said on Thursday.
He noted that at year-end, South32 had completed $986-million of its approved $1-billion capital management programme.