Battery Metals

Manganese Investing

During the third quarter of 2017, the world’s top manganese producer increased its output by 11 percent compared to the previous year.

South32 (ASX:S32) saw its manganese output rise by 11 percent in the September quarter, the company reported on Thursday (October 19).
Australia’s South32 increased its manganese ore production to 1.3 million tonnes due to strong demand in the market. But the diversified miner’s production of alumina, coal, silver, lead and zinc all fell during the period.

South32 warned of rising costs, but is maintaining its annual guidance across operations. “Industry cost curves continue to steepen as a result of US dollar weakness, rising raw material input costs and the environmental policy response in China,” the company said. 

The company’s coking coal production dropped to 494,000 tonnes in September from 1.4 million tonnes a year earlier due to technical problems at its Appin mine.
“South32 is well exposed to the other commodities which appear linked to ongoing reforms in China and we believe this is what has driven the stock in recent times, along with the company’s capital management plan,” RBC Capital Markets analyst Paul Hissey said in a note.
The Perth-based company also increased its net cash balance by $33 million; it stood at $1.67 billion at the end of last month. “Our key commodity markets continue to benefit from strong demand and a steepening of ­industry cost curves,” CEO Graham Kerr said.
“This supportive dynamic has further bolstered our net cash position despite the continuation of our capital management program and the prepayment that will increase our interest in Arizona Mining (TSX:AZ),” he added. South32 increased its stake in the company by 4.9 percent in September.
On Thursday, South32’s share price closed down 3.1 percent, at AU$3.15. The company’s share price has been rising since the beginning of the year, and is up 14.55 percent since January.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Arizona Mining is a client of the Investing News Network. This article is not paid-for content.


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