REG - South32 Limited - Quarterly Report December 2019
RNS Number : 0013ASouth32 Limited16 January 202016 January 2020
South32 Limited
(Incorporated in Australia under the Corporations Act 2001 (Cth))
(ACN 093 732 597)
ASX, LSE, JSE Share Code: S32 ADR: SOUHY
ISIN: AU000000S320
South32 Limited
Quarterly Report December 2019
"We continued our strong start to the year, delivering record year to date production at Brazil Alumina and maintaining production guidance across the majority of our operations.
"We have acted decisively during the quarter in response to market conditions, reducing contractor activity at South Africa Energy Coal and higher cost trucking at our South Africa Manganese business.
"Our disciplined approach to capital allocation has enabled us to maintain our strong financial position and return a further US$331 million in the December 2019 half year with the continuation of our on-market share buy-back and payment of our ordinary dividend in respect of the prior six months.
"We have taken further action to reshape and improve our portfolio. We exercised our option to acquire a 50% interest in the base metals focussed Upper Kobuk Mineral Projects in Alaska, entered into a binding conditional agreement for the sale of South Africa Energy Coal and progressed the review of our manganese alloy smelting exposure."
Graham Kerr, South32 CEO
•
Increased alumina production by 4%, achieving record year to date production at Brazil Alumina and maintaining higher rates of calciner availability at Worsley Alumina as we deliver initiatives to sustainably increase to nameplate capacity.
•
Maintained saleable aluminium production despite the impact of load-shedding at Hillside Aluminium and Mozal Aluminium.
•
Reacted to lower manganese prices in the December 2019 quarter, reducing our use of higher cost trucking and completing an extended maintenance shut at our underground operations at South Africa Manganese.
•
Reduced activity at South Africa Energy Coal in response to market conditions, resulting in a revision of FY20 production guidance to the bottom end of our range.
•
Completed a longwall move at Illawarra Metallurgical Coal's Appin mine during the December 2019 quarter, where the focus remains on lifting development rates to support improved longwall performance and the operation's sustainable return to a three longwall configuration.
•
Entered into a binding conditional agreement with Seriti Resources for the sale of our shareholding in South Africa Energy Coal, with the transaction expected to close in the December 2020 half year, subject to a number of material conditions being satisfied.
•
Exercised our option with Trilogy Metals to acquire a 50% interest in the Upper Kobuk Mineral Projects embedding another base metals development option into our portfolio.
•
Completed the sale of a legacy shareholding owned by our manganese joint venture for US$93M (South32 share), distributing the majority of the proceeds to the Group in the December 2019 quarter.
Production summary
South32 share
1H19
1H20
HoH
2Q19
1Q20
2Q20
QoQ
Alumina production (kt)
2,542
2,635
4%
1,383
1,308
1,327
1%
Aluminium production (kt)
495
496
0%
247
248
248
0%
Energy coal production (kt)
12,929
12,621
(2%)
6,369
6,723
5,898
(12%)
Metallurgical coal production (kt)
3,082
2,859
(7%)
1,567
1,651
1,208
(27%)
Manganese ore production (kwmt)
2,886
2,813
(3%)
1,439
1,415
1,398
(1%)
Manganese alloy production (kt)
109
91
(17%)
57
44
47
7%
Payable nickel production (kt)
21.1
20.6
(2%)
10.4
10.6
10.0
(6%)
Payable silver production (koz)
6,067
6,164
2%
2,882
2,972
3,192
7%
Payable lead production (kt)
48.3
55.3
14%
22.5
26.5
28.8
9%
Payable zinc production (kt)
26.3
32.5
24%
13.1
18.4
14.1
(23%)
Unless otherwise noted: percentage variance relates to performance during the half year ended December 2019 compared with the half year ended December 2018 (HoH) or the December 2019 quarter compared with the September 2019 quarter (QoQ); production and sales volumes are reported on an attributable basis.
Corporate Update
•
In November 2019 we entered into a binding conditional agreement for the sale of our shareholding in South Africa Energy Coal to Seriti Resources Holdings Proprietary Limited (Seriti Resources) and two trusts which will acquire and hold equity on behalf of employees and communities. As previously reported, subject to a number of material conditions1 being satisfied, the transaction is expected to close in the December 2020 half year.
•
We exercised our option to acquire a 50% interest in a joint venture (JV) with Trilogy Metals Inc. (TSX: TMQ, Trilogy) that will own the Upper Kobuk Mineral Projects (UKMP) located in northwest Alaska. On formation of the JV, expected in the March 2020 quarter, Trilogy will contribute all of its assets associated with the UKMP and South32 will contribute US$145M to the JV. The JV will retain US$87.5M of the subscription payment to fund its activities and exploration programs with the balance of US$57.5M loaned back to South32.
•
Our manganese equity accounted investments (EAI) sold a legacy shareholding in an unlisted entity for US$93M (South32 share) during the quarter. With the majority of these funds returned immediately to the Group, we received net distributions2 of US$160M (South32 share) from our manganese EAI during the December 2019 half year.
•
We progressed the review of options for our manganese alloy smelters including their potential divestment, closure or suspension.
•
Consistent with our disciplined approach to capital management we paid our US$139M final dividend in respect of FY19 in October 2019 and purchased a further 106M shares for a cash consideration of US$192M during the December 2019 half year. To 31 December 2019 we had completed US$1.18B of our approved US$1.25B capital management program, including the purchase of 424M shares at an average price of A$3.03 per share (US$939M) and US$239M returned in the form of special dividends.
•
Our geographical earnings mix and the impact of permanent differences that are magnified when margins are compressed or losses are incurred in specific jurisdictions, continues to have a significant bearing on our ETR. Until it is sold, South Africa Energy Coal is expected to have an ETR of 0% with all tax assets de-recognised as at 30 June 2019 and no benefit to be recorded for losses made prior to sale. Accordingly, in the December 2019 half year our Group ETR is expected to be in a range between 75% and 85% (excluding EAI) and is expected to remain elevated should South Africa Energy Coal continue to be loss-making until its divestment.
Production guidance
(South32 share)FY19
1H20
FY20e
Comments
Worsley Alumina
Alumina production (kt)
3,795
1,933
3,965
Brazil Alumina
Alumina production (kt)
1,255
702
1,330
Hillside Aluminium3
Aluminium production (kt)
715
362
720
Mozal Aluminium3
Aluminium production (kt)
267
134
273
South Africa Energy Coal4
Energy coal production (kt)
24,979
11,785
↓26,000
Guidance revised to lower end of range as we adjust volumes to maximise margins in response to market conditions
Domestic coal production (kt)
14,978
6,763
↓15,300
Export coal production (kt)
10,001
5,022
↓10,700
Illawarra Metallurgical Coal
Total coal production (kt)
6,647
3,695
7,000
Metallurgical coal production (kt)
5,350
2,859
5,800
Energy coal production (kt)
1,297
836
1,200
Australia Manganese
Manganese ore production (kwmt)
3,349
1,775
3,560
Subject to market demand
South Africa Manganese
Manganese ore production5 (kwmt)
2,187
1,038
2,100
Subject to market demand
Cerro Matoso
Payable nickel production (kt)
41.1
20.6
35.6
Cannington
Payable zinc equivalent production6 (kt)
218.2
120.1
221.0
Payable silver production (koz)
12,201
6,164
11,200
Payable lead production (kt)
101.4
55.3
104.0
Payable zinc production (kt)
51.6
32.5
59.0
Marketing Update
Realised prices7
1H19
2H19
1H20
1H20
vs
1H19
1H20
vs
2H19
Worsley Alumina
Alumina (US$/t)
458
383
322
(30%)
(16%)
Brazil Alumina
Alumina (US$/t)
504
409
301
(40%)
(26%)
Hillside Aluminium
Aluminium (US$/t)
2,144
1,922
1,859
(13%)
(3%)
Mozal Aluminium
Aluminium (US$/t)
2,171
1,986
1,914
(12%)
(4%)
South Africa Energy Coal
Domestic coal (US$/t)
22
26
23
5%
(12%)
Export coal (US$/t)
83
59
55
(34%)
(7%)
Illawarra Metallurgical Coal
Metallurgical coal (US$/t)
207
210
154
(26%)
(27%)
Energy coal (US$/t)
68
62
53
(22%)
(15%)
Australia Manganese8
Manganese ore (US$/dmtu, FOB)
6.59
6.11
4.49
(32%)
(27%)
South Africa Manganese9
Manganese ore (US$/dmtu, FOB)
5.85
5.29
3.81
(35%)
(28%)
Cerro Matoso10
Payable nickel (US$/lb)
5.20
5.58
6.77
30%
21%
Cannington11
Payable silver (US$/oz)
14.7
14.2
17.5
19%
23%
Payable lead (US$/t)
1,656
1,838
1,869
13%
2%
Payable zinc (US$/t)
2,146
2,096
1,591
(26%)
(24%)
Realised prices exclude third party products and services. We currently anticipate an underlying EBIT loss for third party products and services12 of approximately US$12M in the December 2019 half year (H1 FY19: US$28M). This predominantly reflects the procurement of lower cost third party volumes to replace higher cost equity production in order to fulfil contractual commitments at South Africa Energy Coal.
Development and Exploration Update
•
We completed the voluntary remediation program for historical tailings at Hermosa, establishing the initial tailings storage facility that is able to support the commencement of future production when production permits are received. Our pre-feasibility study remains on-track for completion in the June 2020 half year.
•
We advanced feasibility study work at the Eagle Downs Metallurgical Coal project ahead of a final investment decision scheduled for the December 2020 half year.
•
Consistent with our strategy to partner with companies to fund early stage greenfield exploration opportunities, we invested US$10M during the December 2019 half year. We directed a further US$26M towards exploration programs at our existing operations (US$19M capitalised), including US$2M for our EAI (US$1M capitalised) and US$12M at Hermosa (all capitalised) to further increase our knowledge of the Taylor Deposit and the greater Hermosa land package.
Worsley Alumina
(86% share)
South32 share
1H19
1H20
HoH
2Q19
1Q20
2Q20
2Q20
vs
2Q192Q20
vs
1Q20Alumina production (kt)
1,906
1,933
1%
1,052
952
981
(7%)
3%
Alumina sales (kt)
1,885
1,891
0%
1,035
918
973
(6%)
6%
Worsley Alumina saleable production increased by 1% (or 27kt) to 1,933kt in the December 2019 half year, despite an extended calciner shut, as the refinery continued to benefit from improved calciner availability and we opportunistically sold stockpiled hydrate. FY20 production guidance remains unchanged at 3,965kt with further calciner maintenance scheduled for the March 2020 quarter.
We realised a premium to the Platts Alumina Index13 on a volume weighted M-1 basis for alumina sales in the
December 2019 half year. This mostly reflected the structure of specific legacy supply contracts with our Mozal Aluminium smelter that are linked to the Platts Alumina Index on an M-1 basis, with caps and floors embedded within specific contracts that reset every calendar year. All other alumina sales were at market based prices.
Brazil Alumina
(36% share)
South32 share
1H19
1H20
HoH
2Q19
1Q20
2Q20
2Q20
vs
2Q192Q20
vs
1Q20Alumina production (kt)
636
702
10%
331
356
346
5%
(3%)
Alumina sales (kt)
619
678
10%
317
304
374
18%
23%
Brazil Alumina saleable production increased by 10% (or 66kt) to a record 702kt in the December 2019 half year as the refinery benefitted from improved steam generation following the installation of package boilers in the June 2019 quarter, enabling the benefits of the De-bottlenecking Phase One project to be realised. Notwithstanding the strong operating performance, lower alumina prices and an increase in the use of higher cost third party bauxite is expected to impact the profitability of the operation in the December 2019 half year. FY20 production guidance remains unchanged at 1,330kt with maintenance scheduled for the June 2020 quarter.
Hillside Aluminium
(100%)
South32 share
1H19
1H20
HoH
2Q19
1Q20
2Q20
2Q20
vs
2Q192Q20
vs
1Q20Aluminium production (kt)
360
362
1%
180
181
181
1%
0%
Aluminium sales (kt)
360
350
(3%)
182
174
176
(3%)
1%
Hillside Aluminium saleable production increased by 1% (or 2kt) to 362kt in the December 2019 half year as the smelter continued to test its maximum technical capacity, despite the impact to production from load-shedding and the completion of a major workforce restructure in the June 2019 quarter. Sales decreased by 3% in the December 2019 half year as a shipment slipped into January 2020. FY20 production guidance3 remains unchanged at 720kt.
Mozal Aluminium
(47.1% share)
South32 share
1H19
1H20
HoH
2Q19
1Q20
2Q20
2Q20
vs
2Q192Q20
vs
1Q20Aluminium production (kt)
135
134
(1%)
67
67
67
0%
0%
Aluminium sales (kt)
129
136
5%
70
64
72
3%
13%
Mozal Aluminium saleable production decreased by 1% (or 1kt) to 134kt in the December 2019 half year as the smelter's operating performance continued to be impacted by load-shedding events. Despite an increase in the frequency of disruptions, FY20 production guidance3 remains unchanged at 273kt.
The smelter sources all of its alumina from our Worsley Alumina refinery with approximately 50% priced as a percentage of the LME aluminium index under a legacy contract and the remainder linked to the Platts alumina index on an M-1 basis, with caps and floors embedded within specific contracts that reset every calendar year. As a result the smelter's cost of alumina was a significant premium to the index in the December 2019 half year.
South Africa Energy Coal
(100%)
South32 share
1H19
1H20
HoH
2Q19
1Q20
2Q20
2Q20
vs
2Q192Q20
vs
1Q20Energy coal production (kt)
12,171
11,785
(3%)
6,001
6,292
5,493
(8%)
(13%)
Domestic sales (kt)
7,749
6,688
(14%)
3,646
3,726
2,962
(19%)
(21%)
Export sales (kt)
4,206
4,854
15%
2,283
1,977
2,877
26%
46%
South Africa Energy Coal saleable production decreased by 3% (or 386kt) to 11.8Mt in the December 2019 half year as the operation demobilised contractors in response to market conditions, more than offsetting a 15% increase in export sales volumes following improved dragline availability at Klipspruit.
Notwithstanding the improvement in dragline performance, supporting a 46% increase in export sales during the December 2019 quarter, its ramp-up to full utilisation has been slower than anticipated as a result of wet weather. Combined with our near-term outlook for domestic demand and the demobilisation of contractors operating in unprofitable pits, we now expect FY20 production to be at the bottom end of our guidance range (26.0Mt). Operating unit costs are expected to be approximately 10% above the top end of our guidance range of US$40/t in the December 2019 half year, ahead of benefitting from an expected increase in volumes during the June 2020 half year and the realisation of cost saving initiatives which include contractor demobilisation.
Illawarra Metallurgical Coal
(100%)
South32 share
1H19
1H20
HoH
2Q19
1Q20
2Q20
2Q20
vs
2Q192Q20
vs
1Q20Total coal production (kt)
3,840
3,695
(4%)
1,935
2,082
1,613
(17%)
(23%)
Total coal sales14 (kt)
3,259
3,619
11%
1,755
1,848
1,771
1%
(4%)
Metallurgical coal production (kt)
3,082
2,859
(7%)
1,567
1,651
1,208
(23%)
(27%)
Metallurgical coal sales (kt)
2,527
2,800
11%
1,349
1,482
1,318
(2%)
(11%)
Energy coal production (kt)
758
836
10%
368
431
405
10%
(6%)
Energy coal sales (kt)
732
819
12%
406
366
453
12%
24%
Illawarra Metallurgical Coal saleable production decreased by 4% (or 145kt) to 3.7Mt in the December 2019 half year following the completion of a longwall move at the Appin mine during the December 2019 quarter. FY20 production guidance remains unchanged at 7.0Mt with both the Dendrobium and Appin longwalls continuing to perform strongly and a further longwall move scheduled for the March 2020 quarter. Achieving improved development rates at Appin to support the improved longwall performance and a sustained return to a three longwall configuration at the operation from the June 2020 quarter remains a focus.
Australia Manganese
(60% share)
South32 share
1H19
1H20
HoH
2Q19
1Q20
2Q20
2Q20
vs
2Q192Q20
vs
1Q20Manganese ore production (kwmt)
1,811
1,775
(2%)
879
868
907
3%
4%
Manganese ore sales (kwmt)
1,740
1,737
(0%)
856
852
885
3%
4%
Manganese alloy production (kt)
76
57
(25%)
35
28
29
(17%)
4%
Manganese alloy sales (kt)
76
58
(24%)
47
32
26
(45%)
(19%)
Australia Manganese saleable ore production decreased by 2% (or 36kwmt) to 1,775kwmt in the December 2019 half year as heavy rainfall in late FY19 slowed throughput for the primary circuit at the start of the September 2019 quarter. Separately, with demand for our low cost Premium Concentrate Ore (PC02) product remaining favourable, we continued to operate the circuit above its design capacity, contributing 11% of total production (H1 FY19: 9%). The PC02 fines product has a manganese content of approximately 40%, which leads to both grade and product-type discounts when referenced to the high grade 44% manganese lump ore index.
The Metal Bulletin 44% lump ore index (CIF Tianjin, China) price was US$4.30/dmtu as at 10 January 2020 after averaging US$3.95/dmtu during the month of December 2019. While we continue to monitor market conditions and the potential impact from the wet season across the remainder of the financial year, FY20 production guidance remains unchanged at 3,560kwmt.
Manganese alloy saleable production decreased by 25% (or 19kt) to 57kt in the December 2019 half year as one of the four furnaces was taken offline.
South Africa Manganese
(60% share)
South32 share
1H19
1H20
HoH
2Q19
1Q20
2Q20
2Q20
vs
2Q192Q20
vs
1Q20Manganese ore production5 (kwmt)
1,075
1,038
(3%)
560
547
491
(12%)
(10%)
Manganese ore sales5 (kwmt)
1,010
1,073
6%
523
544
529
1%
(3%)
Manganese alloy production (kt)
33
34
3%
22
16
18
(18%)
13%
Manganese alloy sales (kt)
35
28
(20%)
19
13
15
(21%)
15%
South Africa Manganese saleable ore production decreased by 3% (or 37kwmt) to 1,038kwmt in the December 2019 half year as we reduced our use of higher cost trucking and undertook an extended maintenance shut at our Wessels mine in the December 2019 quarter, in response to market conditions. The Metal Bulletin 37% lump ore index (FOB Port Elizabeth, South Africa) price was US$3.46/dmtu as at 10 January 2020 after averaging US$3.09/dmtu during the month of December 2019. FY20 production guidance remains unchanged at 2,100kwmt, as we continue to monitor market conditions and respond accordingly.
Manganese alloy saleable production increased by 3% (or 1kt) to 34kt in the December 2019 half year.
Cerro Matoso
(99.9% share)
South32 share
1H19
1H20
HoH
2Q19
1Q20
2Q20
2Q20
vs
2Q192Q20
vs
1Q20Payable nickel production (kt)
21.1
20.6
(2%)
10.4
10.6
10.0
(4%)
(6%)
Payable nickel sales (kt)
21.3
20.4
(4%)
10.4
10.0
10.4
0%
4%
Cerro Matoso payable nickel production decreased by 2% (or 0.5kt) to 20.6kt in the December 2019 half year following a planned increase in the contribution of lower grade stockpiled ore feed. FY20 production guidance remains unchanged at 35.6kt with the operation scheduled to undertake a major furnace refurbishment in the June 2020 quarter.
Cannington
(100% share)
South32 share
1H19
1H20
HoH
2Q19
1Q20
2Q20
2Q20
vs
2Q192Q20
vs
1Q20Payable zinc equivalent production6 (kt)
107.4
120.1
12%
51.3
60.5
59.6
16%
(1%)
Payable silver production (koz)
6,067
6,164
2%
2,882
2,972
3,192
11%
7%
Payable silver sales (koz)
6,340
5,912
(7%)
3,283
2,363
3,549
8%
50%
Payable lead production (kt)
48.3
55.3
14%
22.5
26.5
28.8
28%
9%
Payable lead sales (kt)
47.1
51.8
10%
24.6
20.6
31.2
27%
51%
Payable zinc production (kt)
26.3
32.5
24%
13.1
18.4
14.1
8%
(23%)
Payable zinc sales (kt)
24.7
35.3
43%
15.9
18.9
16.4
3%
(13%)
Cannington payable zinc equivalent production increased by 12% (or 12.7kt) to 120.1kt in the December 2019 half year as the operation drew down run of mine stocks to a normalised level and recorded a higher average zinc grade in the September 2019 quarter, that more than offset lower silver grades across the half year.
Processed silver, lead and zinc grades met our expectations in the December 2019 half year and FY20 production guidance remains unchanged (silver 11,200koz, lead 104.0kt and zinc 59.0kt) with sequentially lower lead and silver grades expected in the June 2020 half year. Higher payable zinc sales in the December 2019 half year reflect timing differences following significant floods in North Queensland in the March 2019 quarter that caused an extended outage of a third-party rail line connecting Cannington to the Townsville port.
Notes:
1. Refer to the market announcement "Agreement to Divest South Africa Energy Coal" dated 6 November 2019.
2. Net distributions from equity accounted investments includes net debt movements and dividends, which are unaudited and should not be considered as an indication of or alternative to an IFRS measure of profitability, financial performance or liquidity.
3. Production guidance for our Hillside Aluminium and Mozal Aluminium smelters does not assume any load-shedding impacts on production.
4. 8% of South Africa Energy Coal is owned by a Broad-Based Black Economic Empowerment (B-BBEE) consortium. The interests owned by the B-BBEE consortium were acquired using vendor finance, with the loans repayable to South32 via distributions attributable to these parties, pro rata to their share in South Africa Energy Coal. Until these loans are repaid, South32's interest in South Africa Energy Coal is accounted at 100%.
5. Consistent with the presentation of South32's segment information, South Africa Manganese ore production and sales have been reported at 60%. The Group's financial statements will continue to reflect a 54.6% interest in South Africa Manganese ore.
6. Payable zinc equivalent (kt) was calculated by aggregating Revenue from payable silver, lead and zinc, and dividing the total Revenue by the price of zinc. FY19 realised prices for zinc (US$2,122/t), lead (US$1,754/t) and silver (US$14.4/oz) have been used for FY19, H1 FY20 and FY20e.
7. Realised prices are unaudited. Volumes and prices do not include any third party trading that may be undertaken independently of equity production. Realised sales price is calculated as sales Revenue divided by sales volume unless otherwise stated.
8. Realised ore prices are unaudited and calculated as external sales Revenue less freight and marketing costs, divided by external sales volume. Ore converted to sinter and alloy, and sold externally, is eliminated as an intracompany transaction.
9. Realised ore prices are unaudited and calculated as external sales Revenue less freight and marketing costs, divided by external sales volume. Ore converted to sinter and alloy, and sold externally, is eliminated as an intracompany transaction. Manganese ore sales are grossed-up to reflect a 60% accounting effective interest.
10. Realised nickel sales prices are unaudited and inclusive of by-products.
11. Realised prices for Cannington are unaudited and net of treatment and refining charges.
12. Underlying EBIT on third party products and services is unaudited and should not be considered as an indication of or alternative to an IFRS measure of profitability, financial performance or liquidity.
13. The average of the Platts Alumina Index (FOB Australia) on the basis of a one month lag to published pricing (Month minus one or "M-1") was US$299/t in the December 2019 half year.
14. Illawarra Metallurgical Coal sales are adjusted for moisture and will not reconcile directly to Illawarra Metallurgical Coal production.
The following abbreviations have been used throughout this report: US$ million (US$M); US$ billion (US$B); grams per tonne (g/t); tonnes (t); thousand tonnes (kt); thousand tonnes per annum (ktpa); million tonnes (Mt); million tonnes per annum (Mtpa); ounces (oz); thousand ounces (koz); million ounces (Moz); thousand wet metric tonnes (kwmt); million wet metric tonnes (Mwmt); million wet metric tonnes per annum (Mwmt pa); thousand dry metric tonnes (kdmt).
Figures in Italics indicate that an adjustment has been made since the figures were previously reported. The denotation (e) refers to an estimate or forecast year.
Operating Performance
South32 share
1H19
1H20
2Q19
3Q19
4Q19
1Q20
2Q20
Worsley Alumina (86% share)
Alumina hydrate production (kt)
1,947
1,910
988
921
934
967
943
Alumina production (kt)
1,906
1,933
1,052
893
996
952
981
Alumina sales (kt)
1,885
1,891
1,035
936
1,036
918
973
Brazil Alumina (36% share)
Alumina production (kt)
636
702
331
308
311
356
346
Alumina sales (kt)
619
678
317
247
374
304
374
Hillside Aluminium (100%)
Aluminium production (kt)
360
362
180
176
179
181
181
Aluminium sales (kt)
360
350
182
156
191
174
176
Mozal Aluminium (47.1% share)
Aluminium production (kt)
135
134
67
66
66
67
67
Aluminium sales (kt)
129
136
70
69
70
64
72
South Africa Energy Coal (100%)
Energy coal production (kt)
12,171
11,785
6,001
6,098
6,710
6,292
5,493
Domestic sales (kt)
7,749
6,688
3,646
3,950
3,336
3,726
2,962
Export sales (kt)
4,206
4,854
2,283
2,547
3,122
1,977
2,877
Illawarra Metallurgical Coal (100%)
Total coal production (kt)
3,840
3,695
1,935
1,202
1,605
2,082
1,613
Total coal sales14 (kt)
3,259
3,619
1,755
1,531
1,516
1,848
1,771
Metallurgical coal production (kt)
3,082
2,859
1,567
990
1,278
1,651
1,208
Metallurgical coal sales (kt)
2,527
2,800
1,349
1,256
1,261
1,482
1,318
Energy coal production (kt)
758
836
368
212
327
431
405
Energy coal sales (kt)
732
819
406
275
255
366
453
Australia Manganese (60% share)
Manganese ore production (kwmt)
1,811
1,775
879
820
718
868
907
Manganese ore sales (kwmt)
1,740
1,737
856
782
916
852
885
Ore grade sold (%, Mn)
46.0
45.0
45.8
45.8
46.0
45.6
44.4
Manganese alloy production (kt)
76
57
35
38
40
28
29
Manganese alloy sales (kt)
76
58
47
29
46
32
26
South Africa Manganese (60% share)
Manganese ore production5 (kwmt)
1,075
1,038
560
540
572
547
491
Manganese ore sales5 (kwmt)
1,010
1,073
523
530
573
544
529
Ore grade sold (%, Mn)
40.3
40.0
40.5
39.7
41.7
40.4
39.6
Manganese alloy production (kt)
33
34
22
14
22
16
18
Manganese alloy sales (kt)
35
28
19
16
22
13
15
Cerro Matoso (99.9% share)
Ore mined (kwmt)
1,209
1,400
596
645
424
668
732
Ore processed (kdmt)
1,401
1,389
689
634
703
712
677
Ore grade processed (%, Ni)
1.68
1.66
1.69
1.63
1.65
1.65
1.67
Payable nickel production (kt)
21.1
20.6
10.4
9.4
10.6
10.6
10.0
Payable nickel sales (kt)
21.3
20.4
10.4
9.1
10.8
10.0
10.4
Cannington (100%)
Ore mined (kwmt)
1,306
1,360
683
648
771
694
666
Ore processed (kdmt)
1,244
1,394
606
547
704
656
738
Silver ore grade processed (g/t, Ag)
183
165
181
202
172
168
162
Lead ore grade processed (%, Pb)
4.8
4.8
4.7
5.6
4.8
4.9
4.8
Zinc ore grade processed (%, Zn)
2.9
3.3
3.0
3.0
3.0
3.8
2.8
Payable Zinc equivalent production6 (kt)
107.4
120.1
51.3
50.7
60.1
60.5
59.6
Payable silver production (koz)
6,067
6,164
2,882
2,881
3,253
2,972
3,192
Payable silver sales (koz)
6,340
5,912
3,283
1,820
4,874
2,363
3,549
Payable lead production (kt)
48.3
55.3
22.5
24.8
28.3
26.5
28.8
Payable lead sales (kt)
47.1
51.8
24.6
12.7
41.7
20.6
31.2
Payable zinc production (kt)
26.3
32.5
13.1
10.7
14.6
18.4
14.1
Payable zinc sales (kt)
24.7
35.3
15.9
7.2
15.7
18.9
16.4
Forward-looking statements
This release contains forward-looking statements, including statements about trends in commodity prices and currency exchange rates; demand for commodities; production forecasts; plans, strategies and objectives of management; capital costs and scheduling; operating costs; anticipated productive lives of projects, mines and facilities; and provisions and contingent liabilities. These forward-looking statements reflect expectations at the date of this release, however they are not guarantees or predictions of future performance. They involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this release. Readers are cautioned not to put undue reliance on forward-looking statements. Except as required by applicable laws or regulations, the South32 Group does not undertake to publicly update or review any forward-looking statements, whether as a result of new information or future events. Past performance cannot be relied on as a guide to future performance.
Further information
Investor Relations
Alex Volante
T +61 8 9324 9029M +61 403 328 408
E Alex.Volante@south32.net
Media Relations
Rebecca Keenan
T +61 8 9324 9364M +61 402 087 055
E Rebecca.Keenan@south32.net
Jenny White
T +44 20 7798 1773M +44 7900 046 758
E Jenny.White@south32.net
16 January 2020
JSE Sponsor: UBS South Africa (Pty) Ltd
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.ENDMSCQQLBFBFLEBBQ
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