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South32 Limited ASX:S32 Australian Stock Exchange Ordinary Share
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  0.00 0.0% 3.97 4.30 3.68 0.00 00:08:13

South32 Annual Output Slides for Several Commodities

20/07/2017 2:27am

Dow Jones News


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   By Robb M. Stewart 
 

MELBOURNE, Australia--South32 Ltd. (S32.AU) missed its production guidance for several commodities over the last financial year as its struggled with poor weather, unplanned maintenance and other challenges.

The Australian miner, which was spun out of BHP Billiton Ltd. (BHP.AU) in 2015, on Thursday reported a fall in output of coal and several other products in the year through June despite quarter-over-quarter improvements in output in the final three months of the year.

Production of metallurgical coal, used in steel production, dropped by 19% to 5.7 million metric tons and was steady for the final quarter of the financial year. Energy coal output also weakened, falling about 8% to 30.3 million tons despite a 13% rise quarter-on-quarter at the end of the year.

Alumina output slipped 1% for the year to 5.2 million tons, although was 2% higher in the final quarter, while aluminum production picked up by 2% for fiscal 2017 to 985,000 tons.

Among other commodities, manganese alloy production was down 2% to 220,000 tons, despite jumping 23% on-quarter for the final three months, and manganese ore output was 5% higher for the year at 5 million tons. Payable silver, lead and zinc production were each lower for the year.

"While we didn't achieve the level of consistency that we expect from our broader portfolio, our alumina, nickel and manganese operations finished the year on a strong note," Chief Executive Graham Kerr said.

South32 said South African energy coal production, used by power plants, decreased by 9% for the year despite improved performance in the fourth quarter due to adverse weather and the associated delay in the development of new mining areas, while a severe storm dented export sales from the Richards Bay Coal Terminal. It said the impact is expected to continue to weigh on the business's performance this financial year.

In Australia, production remains suspended at the company's Appin colliery, which accounted for almost half of all output from its Illawarra metallurgical coal unit over the year. Late last month, South32 said Australian regulators had expressed concern about operating practices at the Illawarra operation after it again suspended operations at the Appin mine.

The company's majority-owned Worsley alumina operation in Western Australia state was affected by unplanned maintenance in the three months through March but the refinery ended the financial year on a strong note. Its part-owned Brazilian alumina operation saw saleable production remain largely steady over the year, although sales declined in the final quarter due to the timing of shipments, it said.

 

Write to Robb M. Stewart at robb.stewart@wsj.com

 

(END) Dow Jones Newswires

July 19, 2017 21:12 ET (01:12 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.

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