Manganese output up but coal down for South32

23 January 2017

South32 increased production of manganese in the first half of its fiscal year to take advantage of higher prices, but reported a decline in output of many other commodities, including coal and silver.

The Perth-based miner, the world’s biggest manganese producer, yesterday reported a 4 per cent increase in first-half manganese ore production, to 2.4 million tonnes, compared to the same period a year ago.

The price of manganese, used in alloys to improve resistance to corrosion, surged last year as mining companies held back supplies.

However, the company was not able to leverage a similar surge in coal prices, as a forced temporary shutdown at its troubled Illawarra Metallurgical Coal operations in Australia and ­planned maintenance at its South African operations hit production.

Thermal coal output was down 8 per cent in the first half of the fiscal year, while coking coal volumes slid 14 per cent from a year ago. The miner reported a 2 per cent fall in first-half alumina output, a 27 per cent drop in silver production and a 24 per cent fall in lead output. First-half zinc output was up 1 per cent, as was the company’s production of nickel and aluminium.

South32 was spun out of BHP Billiton and listed in May 2015 to house a collection of assets — such as manganese mines and aluminium smelters — that BHP no longer wanted.

Executives have since restructured its business and taken a knife to spending. The miner reported an improving balance sheet, without providing details. At the end of its first fiscal quarter, South32 said its net cash position widened to $US551 million, from $US312m three months earlier.

Source – The Australian