South32 Hits New Manganese Production Record
Saleable manganese ore production at the company’s Australian manganese operations rose to a record 893 kwmt during the latest quarter.
On Wednesday (January 17), South32 (ASX:S32) released its latest quarterly report, focusing largely on gains in manganese production.
In the report, which covers the December quarter of 2017, South32 states that saleable manganese ore production at its South African operations increased 22 percent from the year-ago period to reach 633 kwmt.
The company’s Australian assets also performed well, achieving record output as saleable manganese ore production increased to 893 kwmt during the period. That’s up 21 percent from the same time a year ago.
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Several factors helped boost the performance of South32’s manganese properties. For the South African division, high-cost trucking and the sale of lower-quality fines products enabled the company to take advantage of favorable market conditions. Additionally, the Wessels central block operated at maximum capacity ahead of planned maintenance in the June quarter.
At the company’s Australian manganese assets, lower-than-expected rainfall during the quarter underpinned higher throughput in the primary circuit, while good market conditions allowed the PC02 circuit to operate at full capacity. Given its strong performance, South32 has increased its annual guidance for the unit by 8 percent, to just over 2 million tonnes.
Graham Kerr, CEO of South32, stated, “[a] record quarter of performance and supportive market dynamics have allowed us to increase FY18 production guidance at South Africa manganese by eight per cent, while production guidance for all other operations remains unchanged.”
Meanwhile, Australia manganese guidance is set at 3,125 kwmt for the year. However, the wet season is expected to impact production across the remainder of the financial year.
Beyond manganese, South32 released noteworthy results for some of its other commodities. It reported another production record at Mozal Aluminum for the December half of the year, with aluminum production up 1 percent, at 137,000 tonnes. South Africa Aluminum is on track to increase production.
Regarding its nickel production, South32 was able to increase payable production at Cerro Matoso by 23 percent over the same period, as ore grades improved with the successful ramp up of La Esmeralda.
Finally, while saleable production fell at its South Africa Energy Coal asset, the company commenced the process to manage the entity as a standalone business from April 2018, and approved a US$301-million investment to extend the life of the Klipspruit colliery by at least 20 years.
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.
