Diversified miner South32 has undergone substantial change in the past year and has evolved considerably since its formation in 2015, with the company working to reshape its portfolio to become a global, diversified producer of the metals critical to a low-carbon future, South32 chief development officer Simon Collins said in an address at the virtual portion of this year’s Prospectors & Developers Association of Canada last week.
He outlined that the company’s favourable commodity mix and recent portfolio improvements supported record earnings and shareholder returns in the first half of its 2022 financial year.
“Study outcomes for our world-class development options in North America underline their potential to supply critical minerals into the future. Our consistent execution is underpinned by our disciplined capital allocation and strong balance sheet,” Collins acclaimed.
He outlined that, in 2015, South32’s portfolio was largely focused on quality manganese ore, alumina, aluminium and coal for steelmaking. However, over time, it has shifted its focus to future-facing-based metals, while exiting lower-return businesses.
Since 2015, the company’s exposure to metals critical to a low-carbon future has shifted from 53% to 74%. The company is seeking to further increase this exposure through its growth options, Collins said, noting that climate commitments were pivotal as South32 continued to reshape its business.
In this regard, the company’s target is to achieve net-zero operational carbon emissions by 2050. In the medium term, it aims to halve these by 2025.
In terms of the company’s current portfolio, Collins said that it recently added copper to the mix through the acquisition of a 45% interest in the Sierra Gorda mine, in Chile, with first production achieved in the last quarter.
South32 expects to double its production of green aluminium by late 2023, owing to the restart of the Brazil Aluminium smelter and the agreement to acquire an additional 16.6% share in Mozal Aluminium, in Mozambique.
Collins enthused that the Brazil smelter was powered by 100% cost efficient renewable power, putting it in the second quartile of the global aluminium cost curve.
“All going well, we expect the smelter will have ramped up to full capacity by the middle of 2023,” he outlined.
“Our next phase of growth is expected to come from our base metals development options in North America,” informed Collins.
This would be from the Hermosa project – a polymetallic mine proposed to be developed in Arizona, in the US – and, in the longer term, the Ambler Metals joint venture – a high-grade development option in north-west Alaska.