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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| South32 Limited | LSE:S32 | London | Ordinary Share | AU000000S320 | ORD NPV (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.70 | -0.37% | 190.40 | 190.20 | 190.70 | 191.50 | 189.50 | 190.30 | 246,179 | 16:35:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Miscellaneous Metal Ores,nec | 7.77B | -173M | -0.0376 | -96.01 | 16.59B |
From May 2019 to May 2024
TIDMS32
RNS Number : 4445E
South32 Limited
18 October 2018
18 October 2018
South32 Limited
(Incorporated in Australia under the Corporations Act 2001)
(ACN 093 732 597)
ASX / LSE / JSE Share Code: S32
ISIN: AU000000S320
south32.net
South32 Limited
Quarterly Report September 2018
"Annual production guidance is maintained for all of our operations with Australia Manganese achieving another quarterly record and total manganese ore production increasing by eight per cent. Illawarra Metallurgical Coal also enjoyed a strong start to the year as an improvement in longwall productivity underpinned an annualised production rate of 7.6Mt in the quarter.
"We finished the period with a net cash balance of US$679 million and additional funds in our manganese joint venture as our key commodity markets benefitted from robust demand and pricing. This strong financial position enabled us to acquire Arizona Mining and Eagle Downs, and to continue our US$1 billion capital management program.
"We continued to make excellent progress in reshaping our portfolio. In addition to the two acquisitions, we continued to advance our 18 greenfield exploration projects and commenced the process to broaden and transform the ownership of South Africa Energy Coal."
Graham Kerr, South32 CEO
Hot Features
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-- Maintained annual production guidance for all operations.
-- Ended the quarter with a net cash position of US$679M, having
acquired Arizona Mining and a 50% interest in Eagle Downs while
continuing our US$1B capital management program.
-- Achieved record quarterly performance at Australia Manganese
and an 8% increase in total manganese ore production as we
continued to take advantage of stronger demand and pricing.
-- Increased Illawarra Metallurgical Coal production by 54% to
1.9Mt with a significant increase in development rates still
required to sustain the operation of two longwalls in parallel
at the Appin colliery from H2 FY20.
-- Continued to operate our aluminium smelters at their maximum
technical capacity and upgraded the first pot at Mozal Aluminium
with the AP3XLE energy efficiency technology.
-- Took advantage of current market dynamics by finalising a number
of agreements to ship stockpiled alumina hydrate in the December
2018 quarter as Worsley Alumina continues to be impacted by
planned and unplanned calciner maintenance.
-- Commenced the process to broaden and transform the ownership
of South Africa Energy Coal, receiving formal expressions of
interest from prospective parties.
Production summary
-------------------------------------------- ----------- ---------- ----- ------ ------ ------ ------
South32's share YTD FY18 YTD FY19 YoY 1Q18 4Q18 1Q19 QoQ
-------------------------------------------- ----------- ---------- ----- ------ ------ ------ ------
Alumina production (kt) 1,279 1,159 (9%) 1,279 1,295 1,159 (11%)
-------------------------------------------- ----------- ---------- ----- ------ ------ ------ ------
Aluminium production (kt) 249 248 (0%) 249 246 248 1%
-------------------------------------------- ----------- ---------- ----- ------ ------ ------ ------
Energy coal production (kt) 7,014 6,560 (6%) 7,014 7,253 6,560 (10%)
-------------------------------------------- ----------- ---------- ----- ------ ------ ------ ------
Metallurgical coal production (kt) 494 1,515 207% 494 1,089 1,515 39%
-------------------------------------------- ----------- ---------- ----- ------ ------ ------ ------
Manganese ore production (kwmt) 1,304 1,447 11% 1,304 1,342 1,447 8%
-------------------------------------------- ----------- ---------- ----- ------ ------ ------ ------
Manganese alloy production (kt) 56 52 (7%) 56 64 52 (19%)
-------------------------------------------- ----------- ---------- ----- ------ ------ ------ ------
Payable nickel production (kt) 11.7 10.7 (9%) 11.7 11.3 10.7 (5%)
-------------------------------------------- ----------- ---------- ----- ------ ------ ------ ------
Payable silver production (koz) 2,763 3,185 15% 2,763 4,234 3,185 (25%)
-------------------------------------------- ----------- ---------- ----- ------ ------ ------ ------
Payable lead production (kt) 25.8 25.8 0% 25.8 31.4 25.8 (18%)
-------------------------------------------- ----------- ---------- ----- ------ ------ ------ ------
Payable zinc production (kt) 11.0 13.2 20% 11.0 12.5 13.2 6%
-------------------------------------------- ----------- ---------- ----- ------ ------ ------ ------
Unless otherwise noted: percentage variance relates to performance during the September 2018
quarter compared with the June 2018 quarter (QoQ); production and sales volumes are reported
on an attributable basis.
Corporate Update
-- On 10 August we completed the acquisition of Arizona Mining(1)
and immediately commenced development of the Hermosa project's
twin exploration declines and a comprehensive review of their
development plans. The twin exploration declines will allow
us to increase our geological understanding of this high grade
resource, while work is also being undertaken on the existing
foreign estimate(2) so that we can declare a Mineral Resource
in accordance with the JORC Code in CY19.
-- On 14 September we completed the acquisition of a 50% interest
in the Eagle Downs metallurgical coal project in Queensland's
Bowen Basin(3) and assumed operating control. We have since
appointed a project director and commenced a review of the
project's development plan.
-- Our net cash(4) balance decreased by US$1,362M to US$679M during
the September 2018 quarter following completion of the Arizona
Mining(1) and Eagle Downs(3) acquisitions for a combined US$1,457M,
and the continuation of our US$1B capital management program.
To the end of the September 2018 quarter we had completed 65%
of this program, having paid a US$154M special dividend on
5 April 2018 and purchased 216M shares at a volume weighted
average price of A$3.03 per share. Subsequent to the end of
the September 2018 quarter we also paid a US$316M fully-franked
dividend in respect of the June 2018 half year.
-- We received net distributions(5) of US$24M (South32 share)
from our manganese equity accounted investments (EAI) during
the September 2018 quarter. The combination of strong operating
performance and pricing has seen additional cash build in our
manganese joint venture, despite Australia Manganese paying
US$134M (100% share) in royalties in respect of the prior 6
month period. Any excess cash within the joint venture is expected
to be distributed to partners in the December 2018 half year.
-- The formal process to broaden and transform the ownership of
South Africa Energy Coal commenced during the September 2018
quarter and several expressions of interest have been received.
Given the likely timeline for this process, we expect to continue
to consolidate the operation in our financial results for the
December 2018 half year.
-- We invested US$12.1M in exploration programs during the September
2018 quarter of which US$3.9M was capitalised (including US$0.1M
for our EAI's) and US$3.8M was directed to our 18 early stage
greenfield exploration projects.
-- Our Underlying Effective Tax Rate (ETR), which excludes tax
associated with our EAI, largely reflects the geographic distribution
of the Group's profit. The corporate tax rates applicable to
the Group include: Australia 30%, South Africa 28%, Colombia
37%(6) , Mozambique 0%(6) and Brazil 34%. The Group's ETR will
rise should profits within our aluminium value chain continue
to transfer upstream to our refineries, which are located in
higher tax paying jurisdictions.
Production guidance (South32's share) FY18 3M YTD FY19 FY19e
Worsley Alumina
============================================ ======= ============ =======
Alumina production (kt) 3,764 854 3,965
============================================ ======= ============ =======
Hillside Aluminium
============================================ ======= ============ =======
Aluminium production (kt) 712 180 720
============================================ ======= ============ =======
Mozal Aluminium
============================================ ======= ============ =======
Aluminium production (kt) 271 68 269
============================================ ======= ============ =======
Brazil Alumina
============================================ ======= ============ =======
Alumina production (kt) 1,304 305 1,355
============================================ ======= ============ =======
South Africa Energy Coal(7)
============================================ ======= ============ =======
Energy coal production (kt) 27,271 6,170 29,000
============================================ ======= ============ =======
Domestic coal production (kt) 15,154 4,064 17,500
============================================ ======= ============ ======= Export coal production (kt) 12,117 2,106 11,500 ============================================ ======= ============ ======= Illawarra Metallurgical Coal ============================================ ======= ============ ======= Total coal production (kt) 4,244 1,905 6,100 ============================================ ======= ============ ======= Metallurgical coal production (kt) 3,165 1,515 4,900 ============================================ ======= ============ ======= Energy coal production (kt) 1,079 390 1,200 ============================================ ======= ============ ======= Australia Manganese ============================================ ======= ============ ======= Manganese ore production (kwmt) 3,396 932 3,350 ============================================ ======= ============ ======= South Africa Manganese ============================================ ======= ============ ======= Manganese ore production(8) (kwmt) 2,145 515 2,050 ============================================ ======= ============ ======= Cerro Matoso ============================================ ======= ============ ======= Payable nickel production (kt) 43.8 10.7 40.5 ============================================ ======= ============ ======= Cannington ============================================ ======= ============ ======= Payable zinc equivalent production (kt)(9) 187.2 49.7 188.1 ============================================ ======= ============ ======= Payable silver production (koz) 12,491 3,185 11,750 ============================================ ======= ============ ======= Payable lead production (kt) 104.4 25.8 98.0 ============================================ ======= ============ ======= Payable zinc production (kt) 41.3 13.2 51.0 ============================================ ======= ============ =======
Worsley Alumina
(86% share)
1Q19 1Q19
vs vs
South32's share YTD FY18 YTD FY19 YoY 1Q18 4Q18 1Q19 1Q18 4Q18
Alumina production (kt) 942 854 (9%) 942 981 854 (9%) (13%)
======================== ======== ======== ===== ==== ==== ==== ===== =====
Alumina sales (kt) 966 850 (12%) 966 967 850 (12%) (12%)
======================== ======== ======== ===== ==== ==== ==== ===== =====
Worsley Alumina hydrate production increased by 5% (or 48kt) to 959kt in the September 2018 quarter while calcined alumina production decreased by 13% (or 127kt) to 854kt as further maintenance was undertaken and the refinery re-established a substantial hydrate inventory position. We took advantage of current market dynamics and agreed multiple contracts, at alumina equivalent rates, to sell opportunistic volumes of hydrate for shipment during the December 2018 quarter. Additional calciner maintenance is scheduled for the March 2019 quarter and FY19 production guidance remains unchanged at 3,965kt.
The average realised price for alumina sales in the September 2018 quarter is expected to reflect a moderate discount to the Platts Alumina Index (PAX)(10) on a volume weighted M-1 basis. This discount reflects the elevated alumina to aluminium price ratio in the spot market and the structure of specific Mozal Aluminium supply contracts that are linked to the LME aluminium price, which in this case reduces the price paid by our smelter.
Hillside Aluminium
(100%)
1Q19 1Q19
vs vs
South32's share YTD FY18 YTD FY19 YoY 1Q18 4Q18 1Q19 1Q18 4Q18
Aluminium production (kt) 180 180 0% 180 179 180 0% 1%
========================== ======== ======== === ==== ==== ==== ===== =====
Aluminium sales (kt) 162 178 10% 162 183 178 10% (3%)
========================== ======== ======== === ==== ==== ==== ===== =====
Hillside Aluminium saleable production increased by 1% (or 1kt) to 180kt in the September 2018 quarter as the smelter continued to test its maximum technical capacity. FY19 production guidance remains unchanged at 720kt. Notwithstanding the smelter's continued strong operating performance, higher prices for alumina and aluminium price-linked power, and still elevated prices for pitch and coke continue to impact its cost base.
Mozal Aluminium
(47.1% share)
1Q19 1Q19
vs vs
South32's share YTD FY18 YTD FY19 YoY 1Q18 4Q18 1Q19 1Q18 4Q18
Aluminium production (kt) 69 68 (1%) 69 67 68 (1%) 1%
========================== ======== ======== ==== ==== ==== ==== ===== =====
Aluminium sales (kt) 65 59 (9%) 65 76 59 (9%) (22%)
========================== ======== ======== ==== ==== ==== ==== ===== =====
Mozal Aluminium saleable production increased by 1% (or 1kt) to 68kt in the September 2018 quarter as the smelter continued to test its maximum technical capacity. The US$18M (South32 share) AP3XLE energy efficiency project commenced the roll out of its pot relining program ahead of schedule during the September 2018 quarter. The project is expected to deliver a circa 5% (or 10kt pa) increase in annual production for no associated increase in power consumption, with the full benefit expected to be realised by FY24. FY19 production guidance remains unchanged at 269kt.
Notwithstanding the smelters continued strong operating performance, higher prices for alumina and still elevated prices for pitch and coke continue to impact its cost base. The smelter sources alumina from our Worsley Alumina refinery with approximately 50% of its requirements priced as a percentage of the LME aluminium index, providing it with some cost relief at current alumina prices.
Brazil Alumina
(36% share)
1Q19 1Q19
vs vs
South32's share YTD FY18 YTD FY19 YoY 1Q18 4Q18 1Q19 1Q18 4Q18
Alumina production (kt) 337 305 (9%) 337 314 305 (9%) (3%)
======================== ======== ======== ==== ==== ==== ==== ===== =====
Alumina sales (kt) 333 302 (9%) 333 378 302 (9%) (20%)
======================== ======== ======== ==== ==== ==== ==== ===== =====
Brazil Alumina saleable production decreased by 3% (or 9kt) to 305kt in the September 2018 quarter as unplanned maintenance and power outages impacted performance. FY19 production guidance remains unchanged at 1,355kt with the refinery expected to creep production over the remainder of the year following the completion of the De-bottlenecking Phase One project in March 2018.
South Africa Energy Coal
(100%)
1Q19 1Q19
vs vs
South32's share YTD FY18 YTD FY19 YoY 1Q18 4Q18 1Q19 1Q18 4Q18
Energy coal production (kt) 6,689 6,170 (8%) 6,689 7,107 6,170 (8%) (13%)
============================ ======== ======== ===== ===== ===== ===== ===== =====
Domestic sales (kt) 3,788 4,103 8% 3,788 4,227 4,103 8% (3%)
============================ ======== ======== ===== ===== ===== ===== ===== =====
Export sales (kt) 2,748 1,923 (30%) 2,748 3,181 1,923 (30%) (40%)
============================ ======== ======== ===== ===== ===== ===== ===== =====
South Africa Energy Coal saleable production decreased by 13% (or 937kt) to 6.2Mt in the September 2018 quarter. Export production was impacted by an incident that caused damage to the dragline at Klipspruit in August 2018, while domestic production declined in response to lower demand, despite the commencement of a new contract to sell additional lower quality stockpiled product in the June 2018 quarter.
The extended dragline outage at Klipspruit which will reduce export coal production by approximately 2Mt, was already included in annual guidance of 29Mt (17.5Mt domestic, 11.5Mt Export). The incident has been confirmed as an insurable event and we expect to recover certain losses. We are currently working with our insurers on a schedule for the dragline's repair and recommissioning.
Illawarra Metallurgical Coal
(100%)
1Q19 1Q19
vs vs
South32's share YTD FY18 YTD FY19 YoY 1Q18 4Q18 1Q19 1Q18 4Q18
Total coal production (kt) 819 1,905 133% 819 1,235 1,905 133% 54%
----------------------------------- -------- -------- ----- ---- ----- ----- ----- -----
Total coal sales (kt) 778 1,504 93% 778 1,365 1,504 93% 10%
----------------------------------- -------- -------- ----- ---- ----- ----- ----- -----
Metallurgical coal production (kt) 494 1,515 207% 494 1,089 1,515 207% 39%
----------------------------------- -------- -------- ----- ---- ----- ----- ----- -----
Metallurgical coal sales (kt) 403 1,178 192% 403 1,120 1,178 192% 5%
----------------------------------- -------- -------- ----- ---- ----- ----- ----- -----
Energy coal production (kt) 325 390 20% 325 146 390 20% 167%
----------------------------------- -------- -------- ----- ---- ----- ----- ----- -----
Energy coal sales (kt) 375 326 (13%) 375 245 326 (13%) 33%
----------------------------------- -------- -------- ----- ---- ----- ----- ----- -----
Illawarra Metallurgical Coal saleable production increased by 54% (or 670kt) to 1.9Mt in the September 2018 quarter as the Appin and Dendrobium longwalls performed strongly following moves in the June 2018 quarter. Notwithstanding the improvement in longwall productivity at Appin, an uplift in development rates is required to sustain the operation of two longwalls in parallel from H2 FY20. We also reached agreement with the employees covered by the Appin Deputies Enterprise Agreement (EA), following agreement of a new Dendrobium Deputies EA in the June 2018 quarter. We continue to renegotiate several other labour agreements at Illawarra Metallurgical Coal and this process is being closely managed.
Production guidance remains unchanged at 6.1Mt with development rates to become an even greater focus and two longwall moves to be completed over the remainder of FY19.
Australia Manganese
(60% share)
1Q19 1Q19
vs vs
South32's share YTD FY18 YTD FY19 YoY 1Q18 4Q18 1Q19 1Q18 4Q18
Manganese ore production (kwmt) 808 932 15% 808 865 932 15% 8%
-------------------------------- -------- -------- ----- ---- ---- ---- ----- -----
Manganese ore sales (kwmt) 790 884 12% 790 875 884 12% 1%
-------------------------------- -------- -------- ----- ---- ---- ---- ----- -----
Manganese alloy production (kt) 39 41 5% 39 42 41 5% (2%)
-------------------------------- -------- -------- ----- ---- ---- ---- ----- -----
Manganese alloy sales (kt) 36 29 (19%) 36 55 29 (19%) (47%)
-------------------------------- -------- -------- ----- ---- ---- ---- ----- -----
Australia Manganese achieved record ore performance in the September 2018 quarter, increasing saleable ore production by 8% (or 67kwmt) to 932kwmt. The primary circuit continued to achieve high utilisation rates while the Premium Concentrate Ore (PC02) circuit operated at approximately 120% of its design capacity, contributing 9% of total production in the quarter. FY19 production guidance remains unchanged at 3,350kwmt with preparation underway for the upcoming wet season.
Manganese alloy saleable production decreased by 2% (or 1kt) to 41kt in the September 2018 quarter.
South Africa Manganese
(60% share)
1Q19 1Q19
vs vs
South32's share YTD FY18 YTD FY19 YoY 1Q18 4Q18 1Q19 1Q18 4Q18
Manganese ore production (kwmt) 496 515 4% 496 477 515 4% 8%
-------------------------------- -------- -------- ----- ---- ---- ---- ----- -----
Manganese ore sales (kwmt) 528 487 (8%) 528 539 487 (8%) (10%)
-------------------------------- -------- -------- ----- ---- ---- ---- ----- -----
Manganese alloy production (kt) 17 11 (35%) 17 22 11 (35%) (50%)
-------------------------------- -------- -------- ----- ---- ---- ---- ----- -----
Manganese alloy sales (kt) 14 16 14% 14 18 16 14% (11%)
-------------------------------- -------- -------- ----- ---- ---- ---- ----- -----
South Africa Manganese saleable ore production increased by 8% (or 38kwmt) to 515kwmt in the September 2018 quarter as production ramped up at Wessels following a planned shutdown that commenced in May 2018. We continued to take advantage of favourable market conditions by selling lower quality secondary product and utilising higher cost trucking. FY19 production guidance remains unchanged at 2,050kwmt.
Manganese alloy saleable production decreased by 50% (or 11kt) to 11kt in the September 2018 quarter as a planned furnace shutdown was completed during the quarter.
Cerro Matoso
(99.9% share)
1Q19 1Q19
vs vs
South32's share YTD FY18 YTD FY19 YoY 1Q18 4Q18 1Q19 1Q18 4Q18
Payable nickel production (kt) 11.7 10.7 (9%) 11.7 11.3 10.7 (9%) (5%)
------------------------------- -------- -------- ---- ---- ---- ---- ----- -----
Payable nickel sales (kt) 11.4 10.9 (4%) 11.4 11.2 10.9 (4%) (3%)
------------------------------- -------- -------- ---- ---- ---- ---- ----- -----
Cerro Matoso payable nickel production decreased by 5% (or 0.6kt) to 10.7kt in the September 2018 quarter as record ore throughput was achieved with an increase in lower grade stockpiled ore feed.
On 24 September, we announced that the Constitutional Court of Colombia had issued its final ruling on our application to annul its decision regarding the alleged health and environmental impacts of our Cerro Matoso operation on the surrounding communities. The Court annulled those orders requiring Cerro Matoso to pay direct financial compensatory damages to community members and establish an ethnic development fund. The orders requiring Cerro Matoso to provide ongoing health care to community members alleging health impacts, and to submit to a new consultative environmental licensing process, were not annulled.
Production has not been impacted by the decision handed down by the Court and FY19 guidance remains unchanged at 40.5kt.
Cannington
(100% share)
1Q19 1Q19
vs vs
South32's share YTD FY18 YTD FY19 YoY 1Q18 4Q18 1Q19 1Q18 4Q18
Payable zinc equivalent production (kt) 45.4 49.7 10% 45.4 58.9 49.7 10% (16%)
---------------------------------------- -------- -------- ----- ----- ----- ----- ----- -----
Payable silver production (koz) 2,763 3,185 15% 2,763 4,234 3,185 15% (25%)
---------------------------------------- -------- -------- ----- ----- ----- ----- ----- -----
Payable silver sales (koz) 2,926 3,057 4% 2,926 3,542 3,057 4% (14%)
---------------------------------------- -------- -------- ----- ----- ----- ----- ----- -----
Payable lead production (kt) 25.8 25.8 (0%) 25.8 31.4 25.8 (0%) (18%)
---------------------------------------- -------- -------- ----- ----- ----- ----- ----- -----
Payable lead sales (kt) 25.9 22.5 (13%) 25.9 25.8 22.5 (13%) (13%)
---------------------------------------- -------- -------- ----- ----- ----- ----- ----- -----
Payable zinc production (kt) 11.0 13.2 20% 11.0 12.5 13.2 20% 6%
---------------------------------------- -------- -------- ----- ----- ----- ----- ----- -----
Payable zinc sales (kt) 13.6 8.8 (35%) 13.6 13.0 8.8 (35%) (32%)
---------------------------------------- -------- -------- ----- ----- ----- ----- ----- -----
Cannington payable zinc equivalent(9) production decreased by 16% (or 9.2kt) to 49.7kt in the September 2018 quarter following the extraction of a high grade sequence of stopes in the prior quarter. Processed silver, lead and zinc grades met our expectations and guidance remains unchanged for FY19 at 186g/t, 5.1% and 3.1%, respectively. Mill throughput was largely unchanged with greater predictability and stability achieved in the underground mine.
The decrease in quarterly sales reflects a change to the shipping schedule requested by a customer. FY19 zinc equivalent(9) production guidance of 188.1kt (silver 11,750koz, lead 98.0kt and zinc 51.0kt) remains unchanged.
Notes:
1. Refer to exchange release on 13 August 2018 "South32 completes acquisition of Arizona Mining".
2. The information in this release that relates to estimates of Mineral Resources for the Hermosa project are foreign estimates under ASX Listing Rules and reference should be made to the clarifying statement on Mineral Resources in the market announcement 'South32 to acquire Arizona Mining in agreed all cash offer' dated 18 June 2018, in accordance with ASX Listing Rule 5.12. South32 is not in possession of any new information or data relating to the foreign estimate that materially impacts on the reliability of the estimates. South32 confirms that the information contained in the clarifying statement in the 18 June 2018 market announcement continues to apply and has not materially changed. The estimates of Mineral Resources are not reported in accordance with the JORC Code. Competent Persons have not done sufficient work to classify the foreign estimates as Mineral Resources in accordance with JORC Code. It is uncertain that following evaluation and further exploration that the foreign estimates will be able to be reported as Mineral Resources or Ore Reserves in accordance with the JORC Code.
3. Refer to media release on 14 September 2018 "South32 completes acquisition of 50% interest in Eagle Downs and assumes operatorship".
4. Net Cash number is unaudited and should not be considered as an indication of or alternative to an IFRS measure of profitability, financial performance or liquidity.
5. Net distributions from equity accounted investments includes net debt movements and dividends, which are unaudited and should not be considered as an indication of or alternative to an IFRS measure of profitability, financial performance or liquidity.
6. The Colombian corporate tax rate was 40% until 31 December 2017. The Mozambique operations are subject to a royalty on revenues instead of income tax.
7. 8% of South Africa Energy Coal is owned by a Broad-Based Black Economic Empowerment (B-BBEE) consortium. The interests owned by the B-BBEE consortium were acquired using vendor finance, with the loans repayable to South32 via distributions attributable to these parties, pro rata to their share in South Africa Energy Coal. Until these loans are repaid, South32's interest in South Africa Energy Coal is accounted at 100%.
8. Consistent with the presentation of South32's segment information, South Africa Manganese ore production and sales have been reported at 60%. The Group's financial statements will continue to reflect a 54.6% interest in South Africa Manganese ore.
9. Payable Zinc Equivalent (kt) is calculated by aggregating revenues from payable silver, lead and zinc, and dividing the total revenue by the price of zinc. FY18 realised prices for zinc (US$3,185/t), lead (US$2,463/t) and silver (US$16.6/oz) have been used for FY18 and FY19e. Zinc equivalent is used to compare Cannington with the recently acquired Hermosa project which is currently reported in zinc equivalent terms.
10. The quarterly sales volume weighted average of the Platts Alumina Index (PAX) (FOB Australia) on the basis of a one month lag to published pricing (Month minus one or "M-1") was US$499/t in the September 2018 quarter.
11. The following abbreviations have been used throughout this report: grams per tonne (g/t); tonnes (t); thousand tonnes (kt); thousand tonnes per annum (ktpa); million tonnes (Mt); million tonnes per annum (Mtpa); thousand ounces (koz); million ounces (Moz); thousand wet metric tonnes (kwmt); million wet metric tonnes (Mwmt); million wet metric tonnes per annum (Mwmt pa); thousand dry metric tonnes (kdmt).
Operating Performance
South32's share YTD FY18 YTD FY19 1Q18 2Q18 3Q18 4Q18 1Q19 ======================================== ======== ======== ===== ===== ===== ===== ===== Worsley Alumina (86% share) ======================================== ======== ======== ===== ===== ===== ===== ===== Alumina hydrate production (kt) 974 959 974 973 938 911 959 ======================================== ======== ======== ===== ===== ===== ===== ===== Alumina production (kt) 942 854 942 923 918 981 854 ======================================== ======== ======== ===== ===== ===== ===== ===== Alumina sales (kt) 966 850 966 920 910 967 850 ======================================== ======== ======== ===== ===== ===== ===== ===== Hillside Aluminium (100%) ======================================== ======== ======== ===== ===== ===== ===== ===== Aluminium production (kt) 180 180 180 178 175 179 180 ======================================== ======== ======== ===== ===== ===== ===== ===== Aluminium sales (kt) 162 178 162 182 184 183 178 ======================================== ======== ======== ===== ===== ===== ===== ===== Mozal Aluminium (47.1% share) ======================================== ======== ======== ===== ===== ===== ===== ===== Aluminium production (kt) 69 68 69 68 67 67 68 ======================================== ======== ======== ===== ===== ===== ===== ===== Aluminium sales (kt) 65 59 65 82 51 76 59 ======================================== ======== ======== ===== ===== ===== ===== ===== Brazil Alumina (36% share) ======================================== ======== ======== ===== ===== ===== ===== ===== Alumina production (kt) 337 305 337 339 314 314 305 ======================================== ======== ======== ===== ===== ===== ===== ===== Alumina sales (kt) 333 302 333 316 314 378 302 ======================================== ======== ======== ===== ===== ===== ===== ===== South Africa Energy Coal (100%) ======================================== ======== ======== ===== ===== ===== ===== ===== Energy coal production (kt) 6,689 6,170 6,689 6,734 6,741 7,107 6,170 ======================================== ======== ======== ===== ===== ===== ===== ===== Domestic sales (kt) 3,788 4,103 3,788 3,546 3,835 4,227 4,103 ======================================== ======== ======== ===== ===== ===== ===== ===== Export sales (kt) 2,748 1,923 2,748 3,117 3,472 3,181 1,923 ======================================== ======== ======== ===== ===== ===== ===== ===== Illawarra Metallurgical Coal (100%) ======================================== ======== ======== ===== ===== ===== ===== ===== Total coal production (kt) 819 1,905 819 1,041 1,149 1,235 1,905 ======================================== ======== ======== ===== ===== ===== ===== ===== Total coal sales (kt) 778 1,504 778 882 1,091 1,365 1,504 ======================================== ======== ======== ===== ===== ===== ===== ===== Metallurgical coal production (kt) 494 1,515 494 788 794 1,089 1,515 ======================================== ======== ======== ===== ===== ===== ===== ===== Metallurgical coal sales (kt) 403 1,178 403 654 760 1,120 1,178 ======================================== ======== ======== ===== ===== ===== ===== ===== Energy coal production (kt) 325 390 325 253 355 146 390 ======================================== ======== ======== ===== ===== ===== ===== ===== Energy coal sales (kt) 375 326 375 228 331 245 326 ======================================== ======== ======== ===== ===== ===== ===== ===== Australia Manganese (60% share) ======================================== ======== ======== ===== ===== ===== ===== ===== Manganese ore production (kwmt) 808 932 808 893 830 865 932 ======================================== ======== ======== ===== ===== ===== ===== ===== Manganese ore sales (kwmt) 790 884 790 822 803 875 884 ======================================== ======== ======== ===== ===== ===== ===== ===== Ore grade sold (%, Mn) 46.1 46.1 46.1 46.0 45.0 45.7 46.1 ======================================== ======== ======== ===== ===== ===== ===== ===== Manganese alloy production (kt) 39 41 39 43 41 42 41 ======================================== ======== ======== ===== ===== ===== ===== ===== Manganese alloy sales (kt) 36 29 36 42 37 55 29 ======================================== ======== ======== ===== ===== ===== ===== ===== South Africa Manganese (60% share) ======================================== ======== ======== ===== ===== ===== ===== ===== Manganese ore production (kwmt) 496 515 496 633 539 477 515 ======================================== ======== ======== ===== ===== ===== ===== ===== Manganese ore sales (kwmt) 528 487 528 539 476 539 487 ======================================== ======== ======== ===== ===== ===== ===== ===== Ore grade sold (%, Mn) 40.7 40.0 40.7 39.9 40.1 39.1 40.0 ======================================== ======== ======== ===== ===== ===== ===== ===== Manganese alloy production (kt) 17 11 17 19 21 22 11 ======================================== ======== ======== ===== ===== ===== ===== =====
Manganese alloy sales (kt) 14 16 14 14 21 18 16 ======================================== ======== ======== ===== ===== ===== ===== ===== Cerro Matoso (99.9% share) ======================================== ======== ======== ===== ===== ===== ===== ===== Ore mined (kwmt) 1,051 613 1,051 1,036 831 823 613 ======================================== ======== ======== ===== ===== ===== ===== ===== Ore processed (kdmt) 696 712 696 644 672 710 712 ======================================== ======== ======== ===== ===== ===== ===== ===== Ore grade processed (%, Ni) 1.91 1.68 1.91 1.75 1.76 1.73 1.68 ======================================== ======== ======== ===== ===== ===== ===== ===== Payable nickel production (kt) 11.7 10.7 11.7 10.1 10.7 11.3 10.7 ======================================== ======== ======== ===== ===== ===== ===== ===== Payable nickel sales (kt) 11.4 10.9 11.4 9.9 10.8 11.2 10.9 ======================================== ======== ======== ===== ===== ===== ===== ===== Cannington (100%) ======================================== ======== ======== ===== ===== ===== ===== ===== Ore mined (kwmt) 647 623 647 562 571 683 623 ======================================== ======== ======== ===== ===== ===== ===== ===== Ore processed (kdmt) 593 638 593 575 544 643 638 ======================================== ======== ======== ===== ===== ===== ===== ===== Silver ore grade processed (g/t, Ag) 175 184 175 155 207 237 184 ======================================== ======== ======== ===== ===== ===== ===== ===== Lead ore grade processed (%, Pb) 5.2 4.9 5.2 4.9 5.2 5.8 4.9 ======================================== ======== ======== ===== ===== ===== ===== ===== Zinc ore grade processed (%, Zn) 2.8 2.9 2.8 2.3 2.5 2.8 2.9 ======================================== ======== ======== ===== ===== ===== ===== ===== Payable zinc equivalent production (kt) 45.4 49.7 45.4 40.0 42.9 58.9 49.7 ======================================== ======== ======== ===== ===== ===== ===== ===== Payable silver production (koz) 2,763 3,185 2,763 2,412 3,082 4,234 3,185 ======================================== ======== ======== ===== ===== ===== ===== ===== Payable silver sales (koz) 2,926 3,057 2,926 2,503 3,014 3,542 3,057 ======================================== ======== ======== ===== ===== ===== ===== ===== Payable lead production (kt) 25.8 25.8 25.8 23.6 23.6 31.4 25.8 ======================================== ======== ======== ===== ===== ===== ===== ===== Payable lead sales (kt) 25.9 22.5 25.9 22.7 23.5 25.8 22.5 ======================================== ======== ======== ===== ===== ===== ===== ===== Payable zinc production (kt) 11.0 13.2 11.0 9.2 8.6 12.5 13.2 ======================================== ======== ======== ===== ===== ===== ===== ===== Payable zinc sales (kt) 13.6 8.8 13.6 12.1 6.3 13.0 8.8 ======================================== ======== ======== ===== ===== ===== ===== =====
Forward-looking statements
This release contains forward-looking statements, including statements about trends in commodity prices and currency exchange rates; demand for commodities; production forecasts; plans, strategies and objectives of management; capital costs and scheduling; operating costs; anticipated productive lives of projects, mines and facilities; and provisions and contingent liabilities. These forward-looking statements reflect expectations at the date of this release, however they are not guarantees or predictions of future performance. They involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this release. Readers are cautioned not to put undue reliance on forward-looking statements. Except as required by applicable laws or regulations, the South32 Group does not undertake to publicly update or review any forward-looking statements, whether as a result of new information or future events. Past performance cannot be relied on as a guide to future performance.
Further information
Investor Relations Media Relations Alex Volante Rob Moore Jenny White T +61 8 9324 9029 T +61 8 9324 9695 T +44 20 7798 1773 M +61 403 328 408 M +61 426 699 835 M +44 7900 046 758 E Alex.Volante@south32.net E Rob.Moore@south32.net E Jenny.White@south32.net
18 October 2018
JSE Sponsor: UBS South Africa (Pty) Ltd
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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October 18, 2018 02:01 ET (06:01 GMT)
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