PERTH (miningweekly.com) – Diversified miner South32 has reported record performances at its Australian manganese and Mozal aluminium operations during the 2018 financial year ended June, while also exceeding revised production guidance for its Illawarra metallurgical coal operations.
“We delivered record annual production at Australia manganese and Mozal aluminium, increased payable nickel production at Cerro Matoso by 20%, and finished the year on a strong note at the remainder of our operations,” said South32 CEO Graham Kerr.
Manganese ore production for the full year was up 10% on the previous financial year, to 5.5-million tonnes, while manganese alloy production in the same period was up 11% to 244 000 t.
During the three months to June, manganese ore production decreased by 2% on the previous quarter, to 1.3-million tonnes, while manganese alloy production was up by 3%, to 64 000 t.
Saleable ore production from the Australia manganese operation increased by 13% to a record 3.4-million tonnes in the 2018 financial year, as the premium concentrate ore circuit operated at around 107% of its design capacity, contributing 9% of total production.
Saleable ore production from the South African operations increased by 5% to 2.1-million tonnes in the financial year, as South32 takes advantage of favourable market conditions by selling lower quality fines product and using higher cost trucking.
The firm will complete major maintenance at the Wessels underground mine, in the Northern Cape, this month.
Meanwhile, alumina production for the full year reached 5-million tonnes, down 3% on the previous financial year, while aluminium production stayed consistent at 983 000 t. In the fourth quarter, alumina production was up by 5% on the previous quarter, to 1.29-million tonnes, while aluminium production was up 2% to 246 000 t.
Aluminium production from Mozal reached a record 217 000 t in the full year, as the smelter continued to test its maximum technical capacity. This production was only marginally higher than the 2017 production.
South32 reported that energy coal production from South Africa had decreased by 6%, to 28.3-million, while metallurgical coal production from Australia was down 44% on the previous financial year, to 3.1-million tonnes.
In the fourth quarter, energy coal production increased by 2% on the previous quarter, to 7.2-million tonnes, and metallurgical coal productions increased by 37%, to over 1-million tonnes.
The miner said that saleable production from the South Africa energy coal operation, which is now being managed as a standalone business, dropped by 6% on the back of subdued demand from the domestic market, and sales volumes that were reweighted towards the export market.
The Illawarra metallurgical coal operation saw saleable coal production decrease by 40% as the Appin colliery recovered from an extended outage in the first half of the year.
However, the Illawarra operations exceeded their revised production guidance, with an annualised mining rate of more than six-million tonnes achieved throughout the month of June.
Meanwhile, payable nickel production for the full year was up by 20% on the 2017 figures, to 43 800 t, with quarterly production increasing by 6%, to 11 300 t, compared with the previous quarter.
Silver production during the year declined by 20%, to 12.4-million ounces, while lead and zinc production were also down by 21% and 41% respectively, to 104 400 t and 41 300 t.
In the fourth quarter, silver production was up 37% on the previous quarter, to 4.2-million ounces, while lead production increased by 33%, to 31 400 t, and zinc production increased by 45%, to 12 500 t.
“We are actively reshaping our portfolio and are now managing South Africa energy coal as a standalone business, allowing us to simplify the group, lower overhead costs and fundamentally change the way we work,” Kerr said on Thursday.
The decision to run the South African energy coal business as a standalone entity is aimed at improving the financial performance of the unit, with the restructured entity having a separately tailored functional support system and governance process.
“In accordance with our disciplined capital management framework, we purchased a further 98-million shares in 2018 for a cash consideration of $254-million. At year end, we had completed $260-million of our approved $1-billion capital management programme,” Kerr said.