Quarterly Report December 2023

Highlights for the quarter include a 20 per cent increase in zinc and nickel and a seven per cent increase in silver and record half year aluminium production, while production from Brazil Alumina, Mozal Aluminum and molybdenum output from Sierra Gorda was below plan. 

FY24 Group copper equivalent production guidance has been reduced by three per cent¹, reflecting revised guidance for Brazil Alumina, Mozal Aluminium and molybdenum from Sierra Gorda. 

“With some of our commodities facing headwinds in the half, we continued to focus on delivering cost efficiencies and expect first half Operating unit costs to be below or in line with guidance for the majority of our operations.”  said Graham Kerr, South32 Chief Executive Officer.

Production results

Across the first half of FY24, we achieved record half year aluminium production, as Hillside Aluminium maintained its strong performance and Brazil Aluminium delivered an eight per cent increase in quarterly production.

Cannington payable zinc equivalent production² increased by 13 per cent in the December 2023 half year, as we mined a higher-grade sequence of stopes during the quarter.

At Cerro Matoso there was a 20 per cent increase in quarterly payable nickel production, following the completion of planned maintenance and a temporary reduction in third-party gas supply in the prior quarter.

Sierra Gorda payable copper equivalent production³ decreased by 14 per cent in the December 2023 half year, due to lower planned copper grades, and a temporary outage of the molybdenum plant.

Illawarra Metallurgical Coal production decreased by 39 per cent in the December half year, as we completed two planned longwall moves. FY24 guidance is unchanged with volumes remaining weighted to the second half.

Manganese production decreased by five per cent in the December half year, as lower yields impacted secondary production at Australia Manganese, and South Africa Manganese completed planned maintenance.

We returned US$145M in fully-franked ordinary dividends in respect of H2 FY23 during the December 2023 quarter. We also returned US$35M via our on-market share buy-back during the December 2023 half year, purchasing a further 16M shares at an average price of A$3.37.

Looking ahead

In the December 2023 quarter we continued to invest to further increase our exposure to commodities critical to a low-carbon future.

“At our Hermosa project, we progressed construction of critical path infrastructure and the FAST-41 federal permitting process and remain on track to make a final investment decision for the Taylor deposit in the March 2024 quarter,” said Graham, “Sierra Gorda also continued work on the fourth grinding line expansion project, which has the potential to sustainably increase our production of copper.”

“As we enter the second half, strengthening market conditions for many of our commodities, our planned seven per cent production growth and ongoing cost management focus, positions us well to capture higher margins”.

Thank you to our teams around the world for your efforts and ongoing commitment.  

See South32’s full December 2023 Quarterly Report here

Footnotes

¹ Group payable copper equivalent production based on revised FY24 production guidance, calculated by applying FY23 realised prices for all operations.

² Payable zinc equivalent production (kt) was calculated by aggregating revenues from payable silver, lead and zinc, and dividing the total Revenue by the price of zinc. FY23 realised prices for zinc (US$2,151/t), lead (US$1,919/t) and silver (US$21.1/oz) have been used for FY23, H1 FY24 and FY24e.

³ Payable copper equivalent production (kt) was calculated by aggregating revenues from copper, molybdenum, gold and silver, and dividing the total Revenue by the price of copper. FY23 realised prices for copper (US$3.51/lb), molybdenum (US$21.28/lb), gold (US$1,821/oz) and silver (US$21.9/oz) have been used for FY23, H1 FY24 and FY24e.