Graham Kerr
PERTH (miningweekly.com) – Diversified miner South32 on Thursday reported an increase in production across most of its portfolio for the three months to June, compared with the previous quarter, but its full-year performance was lower for several commodities.
The Perth-headquartered group, which operates in Australia and South Africa, increased its alumina and aluminium production by 2% and 1% respectively in the June quarter, to 1.3-million tonnes and 248 000 t. The Mozal smelter, in Mozambique, and the South African aluminium refinery each delivered a 2% increase in output.
“We delivered record annual production at Mozal aluminium and stronger aluminium volumes overall as both of our smelters continued to operate at their maximum capability,” said South32 CEO Graham Kerr.
However, he said the group did not achieve the level of consistency that it had expected from its broader portfolio, although alumina, nickel and manganese operations finished the year on a strong note.
In the full year ended June, alumina production decreased by 1% to 5.2-million tonnes, narrowly missing its guidance of 5.3-million tonnes. Aluminium production increased by 2% to 985 000 t.
Nickel production for the June quarter was up 7% on the previous three months, to 9 700 t. Full-year production was 1% lower at 36 500 t, but was in line with its guidance.
Manganese ore production rose 2% to 1.3-million tonnes and alloy production was up 23% 58 000 t in the fourth quarter. Full-year manganese ore production increased by 5% to 5-million tonnes and alloy production decreased by 2% to 220 000 t.
Meanwhile, energy coal production for the June quarter was up 13%, to 7.7-million tonnes, while metallurgical coal production remained unchanged between the third and fourth quarter, at 1.4-million tonnes.
Production at the Appin mine, in New South Wales, which accounted for 49% of total coal production in the full 2017, was suspended in the June quarter, over concerns around a potential gas breach.
“Production at the Illawarra metallurgical coal Appin colliery remains suspended as a comprehensive review of the operation’s systems and processes is undertaken. This in-depth review has been designed to ensure the operation restarts safely and reliability,” Kerr said.
Energy coal production fell by 8%, to 30.2-million tonnes in the full year, while metallurgical coal production over the last 12 months dropped by 19%, to 5.6-million tonnes.
Both missed the full-year guidance that South32 provided in its half-year results. The company had planned to produce 32.4-million tonnes of energy coal and 6.4-million tonnes of metallurgical coal.
The full-year coal production was affected by challenging ground conditions in the new Appin Area 9 longwall block and two extended outages at the Appin colliery, which resulted in a 15% decline in the full-year production from the mine.
In South Africa, adverse weather conditions and delays in the development of a new mining area affected Wolvekrans-Middelburg Complex energy coal production.
The biggest full-year decreases were reported for silver and base metals. South32 said its silver production decreased by 27% to 15.6-million ounces, lead production dropped by 24% to 132 100 t and zinc production fell by 11% to 70 400 t.