The share price in South 32, a global mining and metals group, slid to a 7% low after it said yesterday that despite remaining on track to meet its 2023 production guidance at the majority of its operations, its group guidance was revised down due to weather and other temporary impacts.
The shares fell to an intra-day low of R49.62 at about 9am, and was trading 5.71% lower at R50.23 at 3pm.
In its quarterly report, the diversified miner, listed on the JSE, ALX, and London Stock Exchange, reported that its group guidance would be revised down by 8%, as group production was below plan in the March, 2023 quarter.
South32 CEO Graham Kerr said: “We remain well-positioned to capitalise on improved market conditions, with higher production volumes expected to finish the 2023 financial year, with operating unit cost and capital expenditure guidance largely unchanged.
“We continue to reshape our portfolio towards commodities critical to a low-carbon future, progressing construction and development studies at Hermosa, and adding the prospective Chita Valley copper project to our portfolio of greenfield options.”
Kerr said the group-wide copper equivalent production increased by 7% following investments last year, which added copper to its portfolio and increased its share of low-carbon aluminium.
“Manganese ore production has increased by 65% year on year, with Australia Manganese achieving record production. The Eastern Leases project at Australia Manganese has been approved, extending the life of the operation and unlocking significant value,” he said.
Kerr said several operations faced challenging conditions during the quarter, with production guidance revised down as a result.
“At Mozal Aluminium, we reduced output as the team continued to work through their recovery plan following the devastating loss of two of our colleagues in November, with efforts hampered by severe flooding in the local area.
“We also temporarily suspended mining activity at Cannington during the quarter to enable the safe return to operations following heavy rainfall,” he said.
South32 said improved market conditions supported higher prices across most of its commodities quarter on quarter, with strong price realisations for its premium hard coking coal and manganese products.
South32 said South Africa Manganese increased production by 5% in the year to date and remains on track to achieve the 2023 financial year guidance.
Brazil Alumina lifted production by 6% in the year to date, and Worsley Alumina completed planned calciner maintenance.
“Sierra Gorda delivered strong volume growth in copper and remains on track to achieve the 2023 financial year production guidance. Cannington experienced severe wet weather during the quarter which resulted in the temporary suspension of mining activity and prevented a rebuild in mining stocks, with FY23 production guidance revised down by 6%,” the group said.
South32 reported that Cerro Matoso nickel production in the year to date was largely unchanged, reflecting a temporary reduction in access to higher-grade ore in the quarter, with the 2023 financial year production guidance revised down by 7%.
“Australia Manganese achieved record production and a 6% increase in the year-to-date volumes, supporting a 3% increase in the 2023 financial year production guidance,” it said.
BUSINESS REPORT