South32 cuts output across divisions

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South32 cuts output across divisions

7:58 CAT | 24 Apr 2023

Image: South32

Australian diversified miner South32 Ltd S32.AX on Monday cut output guidance for several operations hit by wet weather and other issues in the third quarter, which sent its shares down nearly 10%.

The Perth-headquartered miner said however it expected to benefit from higher volumes and prices in the June quarter.

Its shares slid as much as 10% to A$4.00, sharply underperforming a 2.2% drop in the mining sector .AXMJ.

Wet weather and temporary disruptions at the Appin metallurgical coal mine led to a 21% drop in metallurgical coal production in the March quarter from a year earlier and a 7% cut in output guidance for the year.

The division is its most lucrative, comprising a third of earnings during the first half.

South32 said it now expects to produce 6.5 million tonnes of Illawarra metallurgical coal for the year to June 2023, down from a forecast of 7.0 million tonnes.

South 32 also cut output guidance at Mozal Aluminium by 8% to 340,000 tonnes and Cannington payable zinc equivalent production by 6% to 195,900 tonnes. It lowered its nickel production forecast by 7% to 40,500 tonnes.

However, the company said it remains on-track to meet its full year production guidance at most of its operations.

“We remain well positioned to capitalise on improved market conditions, with higher production volumes expected to finish the 2023 financial year,” CEO Graham Kerr said in a statement.

The company raised its operating unit cost guidance for metallurgical coal to $127 per tonne from $119 for the year, due to the production disruptions.

Source: Reuters