QUARTERLY
REPORT
December 2024
South32 Chief Executive Officer, Graham Kerr:
"We continued our strong start to the year,
maintaining production guidance for all of our operations except
Mozal Aluminium, as we continue to mitigate the impact of civil
unrest in Mozambique.
"We achieved strong results in the December 2024 quarter,
delivering higher base metals production and increasing alumina
production by 14 per cent, capturing the benefit of strong alumina
prices.
"We returned US$169M to shareholders, paying fully-franked
ordinary dividends in respect of the prior six months and
continuing our on-market share buy-back, leaving US$171M to be
returned to shareholders under our capital management
program.
"Having successfully divested Illawarra Metallurgical Coal in
the September 2024 quarter, we have a strong balance sheet and
platform for growth in minerals and metals critical to the world's
energy transition.
"At Hermosa, construction of the zinc-lead-silver Taylor
deposit reached a significant milestone as we commenced shaft
sinking in the quarter. We also progressed development of an
exploration decline at the Clark battery-grade manganese deposit
and exploration drilling at the Peake copper deposit to unlock
further value across our broader land package.
"We also continued to strengthen our growth pipeline,
embedding additional copper exploration options in highly
prospective regions during the period."
|
·
|
Maintained FY25 production guidance
for all operations, except Mozal Aluminium,
where guidance was withdrawn in December 2024 due to civil unrest
in Mozambique1.
|
|
·
|
Aluminium production increased by 5%
in the December 2024 half year as Hillside Aluminium continued to
test its maximum technical capacity, and low-carbon
aluminium2 production from
Brazil Aluminium and Mozal Aluminium increased by 12%.
|
|
·
|
Alumina production declined by 2% in
the December 2024 half year, while quarterly volumes improved by
14% as Worsley Alumina completed planned calciner maintenance and
Brazil Alumina benefitted from improved plant
availability.
|
|
·
|
Worsley Alumina received State
environmental approval for the Worsley Mine Development
Project3 and remains on track to
receive Federal approval in the March 2025 quarter.
|
|
·
|
Sierra Gorda payable copper
equivalent production4 increased
by 21% in the December 2024 half year as the operation benefitted
from improved ore quality in the current phase of the mine
plan.
|
|
·
|
Cannington delivered a 56% increase
in payable zinc equivalent production5 in the December 2024 quarter,
as we completed additional dewatering in the prior quarter, and
realised higher planned lead and silver grades.
|
|
·
|
Australia Manganese resumed
production from the primary concentrator and progressed
construction of infrastructure as part of the recovery plan. A
further US$150M (100% basis) of insurance claims were approved in
the December 2024 quarter.
|
|
·
|
Commenced shaft sinking at Hermosa's
Taylor zinc-lead-silver project and continued development of an
exploration decline for the Clark battery-grade manganese
deposit.
|
|
·
|
Acquired a 19.9% interest in
American Eagle Gold Corp., which holds an option to acquire a 100%
interest in the Nakinilerak copper porphyry exploration prospect in
British Columbia, Canada6.
|
|
Production summary
|
|
|
|
|
|
|
|
|
|
|
South32 share
|
1H24
|
1H25
|
HoH
|
|
2Q24
|
1Q25
|
2Q25
|
QoQ
|
|
|
Alumina production (kt)
|
2,574
|
2,532
|
(2%)
|
|
1,284
|
1,184
|
1,348
|
14%
|
|
|
Aluminium production (kt)
|
575
|
604
|
5%
|
|
287
|
298
|
306
|
3%
|
|
|
Payable copper production
(kt)
|
31.6
|
36.7
|
16%
|
|
15.6
|
17.6
|
19.1
|
9%
|
|
|
Payable silver production
(koz)
|
6,999
|
5,916
|
(15%)
|
|
3,624
|
2,066
|
3,850
|
86%
|
|
|
Payable lead production
(kt)
|
58.8
|
49.6
|
(16%)
|
|
30.3
|
19.3
|
30.3
|
57%
|
|
|
Payable zinc production
(kt)
|
29.0
|
22.9
|
(21%)
|
|
15.8
|
12.1
|
10.8
|
(11%)
|
|
|
Payable nickel production
(kt)
|
18.3
|
18.5
|
1%
|
|
10.0
|
8.6
|
9.9
|
15%
|
|
|
Manganese ore production
(kwmt)
|
2,790
|
1,721
|
(38%)
|
|
1,272
|
597
|
1,124
|
88%
|
|
|
Unless otherwise noted: percentage
variance relates to performance during the December 2024 half year
compared with the December 2023 half year (HoH), or the December
2024 quarter compared with the September 2024 quarter (QoQ);
production and sales volumes are reported on an attributable
basis.
|
|
CORPORATE UPDATE
Safety
|
·
|
We remain united by our belief that
everyone can go home safe and well every day. We continued to
implement our multi-year Safety Improvement Program during the
December 2024 half year. This includes our investment in safety
leadership through our LEAD Safely Every Day program which is being
extended to frontline employees, contractors that perform high-risk
work at our operations, and functional roles that support
them.
|
|
·
|
On 17 September 2024, Mr José Luis
Pérez was fatally injured in an incident at Cerro Matoso. Our
deepest sympathies remain with Mr Pérez's family and colleagues to
whom we are continuing to provide support. The incident occurred
while Mr Pérez was at Cerro Matoso to perform a scaffold
maintenance task. An investigation into the incident was completed
during the December 2024 quarter and we are engaging with the
relevant authorities. Key learnings from the incident have been
shared across our organisation, and improvement actions are
underway.
|
Financial
|
·
|
We delivered improved sales
performance in our aluminium value chain in the December 2024
quarter, increasing quarterly sales volumes of alumina and
aluminium by 16% and 10%, respectively, and drawing down
inventory. The
timing of sales and higher commodity prices resulted in a temporary
increase in trade receivables and
contributed to a build in working capital of ~US$120M in the
December 2024 quarter (H1 FY25: total build of
~US$270M).
|
|
·
|
We invested ~US$210M in Group
capital expenditure (excluding equity accounted investments (EAI)
and Hermosa) in H1 FY25, including US$57M at Illawarra
Metallurgical Coal prior to its divestment on 29 August
20247.
|
|
·
|
We received net
distributions8 of US$86M
(South32 share) from our Sierra Gorda EAI in H1 FY25, including
US$54M in the December 2024 quarter.
|
|
·
|
No funding was provided to Australia
Manganese in the December 2024 quarter (September 2024 quarter:
US$63M), as a further US$150M (100% basis) of external insurance
claims were approved in the quarter (H1 FY25: US$250M, 100% basis).
We are continuing to work with our insurers to assess the timing
and value of further recoveries in relation to the impact of
Tropical Cyclone Megan.
|
|
·
|
We incurred idle capacity and
remediation related costs at Australia Manganese of ~US$75M (60%
basis) in H1 FY25, which will be excluded from Underlying earnings
as an earnings adjustment.
|
|
·
|
We returned US$140M in fully-franked
ordinary dividends in respect of H2 FY24 during the December 2024
quarter.
|
|
·
|
We also returned US$29M via our on-market share buy-back in H1 FY25,
purchasing 12M shares at an average price of A$3.64 per share,
leaving US$171M remaining to be returned to
shareholders ahead of extension or expiry of the program on 12
September 20259.
|
|
·
|
We made Group tax payments
(excluding EAIs) of US$116M in H1 FY25. Our H1
FY25 Group Underlying effective tax rate (ETR) is expected to be
~35%, reflecting our geographical earnings
mix and the corporate tax rates10 and royalty related
taxes11 of the jurisdictions in which we
operate.
|
DEVELOPMENT AND EXPLORATION
UPDATE
Hermosa project
|
·
|
We invested ~US$250M of growth
capital expenditure at Hermosa in H1 FY25, as we progressed
construction of the Taylor zinc-lead-silver project and an
exploration decline for the Clark battery-grade manganese
deposit.
|
|
·
|
Construction of Taylor progressed as
planned in the December 2024 quarter, as we commissioned the
hoisting system for the ventilation shaft and commenced sinking.
Earthworks for the processing plant site were also completed in the
quarter, with construction activity for the processing plant
scheduled to increase across the second
half of FY25.
|
|
·
|
We directed
US$16M to capitalised exploration in
H1 FY25 as we continued to test the potential for a continuous
copper system connecting the Peake copper deposit and Taylor
Deeps.
|
Greenfield exploration
|
·
|
We invested US$18M in our greenfield exploration
opportunities in H1 FY25 as we progressed multiple exploration
programs targeting base metals in Australia, USA, Canada,
Argentina, Namibia and Ireland.
|
|
·
|
We acquired a 19.9% interest in
American Eagle Gold Corp. (AEG) for US$21M
in the December 2024
quarter6. AEG holds an option to
acquire a 100% interest in the Nakinilerak
exploration prospect, located within the Babine copper-gold
porphyry district in British Columbia, Canada.
|
Other exploration
|
·
|
We invested US$31M (US$26M
capitalised) in exploration programs at our existing operations and
development options in H1 FY25, including
US$16M at the Hermosa project (noted above, all capitalised), US$7M
for our Sierra Gorda EAI (all capitalised) and
US$3M for our manganese EAI (nil capitalised).
|
PRODUCTION SUMMARY
|
Production guidance (South32 share)
|
|
|
|
|
|
|
|
FY24
|
1H25
|
FY25e(a)
|
%(b)
|
Comments
|
|
Worsley Alumina
|
|
|
|
|
|
|
Alumina production (kt)
|
3,777
|
1,850
|
3,750
|
49%
|
|
|
Brazil Alumina (non-operated)
|
|
|
|
|
|
|
Alumina production (kt)
|
1,286
|
682
|
1,350
|
51%
|
|
|
Brazil Aluminium (non-operated)
|
|
|
|
|
|
|
Aluminium production (kt)
|
104
|
64
|
130
|
49%
|
|
|
Hillside Aluminium12
|
|
|
|
|
|
|
Aluminium production (kt)
|
720
|
362
|
720
|
50%
|
|
|
Mozal Aluminium
|
|
|
|
|
|
|
Aluminium production (kt)
|
314
|
178
|
N/A
|
N/A
|
Production guidance withdrawn in
December 2024 due to civil unrest in
Mozambique1
|
|
Sierra Gorda (non-operated)
|
|
|
|
|
|
|
Payable copper equivalent production
(kt)4
|
73.5
|
46.4
|
84.8
|
55%
|
|
|
Payable copper production
(kt)
|
60.8
|
36.7
|
70.0
|
52%
|
|
Payable molybdenum production
(kt)
|
0.9
|
0.9
|
1.3
|
69%
|
|
Payable gold production
(koz)
|
24.6
|
15.9
|
25.0
|
64%
|
|
Payable silver production
(koz)
|
607
|
301
|
550
|
55%
|
|
Cannington
|
|
|
|
|
|
|
Payable zinc equivalent production
(kt)5
|
302.5
|
129.9
|
265.4
|
49%
|
|
|
Payable silver production
(koz)
|
12,666
|
5,615
|
11,300
|
50%
|
|
Payable lead production
(kt)
|
112.4
|
49.6
|
100.0
|
50%
|
|
Payable zinc production
(kt)
|
60.7
|
22.9
|
50.0
|
46%
|
|
Cerro Matoso
|
|
|
|
|
|
|
Payable nickel production
(kt)
|
40.6
|
18.5
|
35.0
|
53%
|
|
|
Australia Manganese
|
|
|
|
|
|
|
Manganese ore production
(kwmt)
|
2,324
|
639
|
1,000
|
64%
|
|
|
South Africa Manganese
|
|
|
|
|
|
|
Manganese ore production
(kwmt)
|
2,175
|
1,082
|
2,000
|
54%
|
|
|
Illawarra Metallurgical Coal13
|
|
|
|
|
|
|
Total coal production
(kt)
|
4,938
|
766
|
N/A
|
N/A
|
Results represent ownership period
July to August 20247
|
|
Metallurgical coal production
(kt)
|
4,305
|
676
|
N/A
|
N/A
|
|
Energy coal production
(kt)
|
633
|
90
|
N/A
|
N/A
|
a. The
denotation (e) refers to an estimate or forecast year.
b. Reflects
percentage of achieved production for H1 FY25 compared to current
FY25e.
MARKETING UPDATE
The average realised prices achieved
for our commodities are summarised below. Provisionally priced
sales were revalued at 31 December 2024 with the final price of
these to be determined in the June 2025 half year.
|
Realised prices14
|
|
|
|
|
|
|
|
1H24
|
2H24
|
1H25
|
1H25
vs
1H24
|
1H25
vs
2H24
|
|
Worsley Alumina
|
|
|
|
|
|
|
Alumina (US$/t)
|
344
|
376
|
512
|
49%
|
36%
|
|
Brazil Alumina (non-operated)(a)
|
|
|
|
|
|
|
Alumina (US$/t)
|
362
|
394
|
590
|
63%
|
50%
|
|
Brazil Aluminium
(non-operated)(a)
|
|
|
|
|
|
|
Aluminium (US$/t)
|
2,275
|
2,435
|
2,508
|
10%
|
3%
|
|
Hillside Aluminium
|
|
|
|
|
|
|
Aluminium (US$/t)
|
2,318
|
2,448
|
2,687
|
16%
|
10%
|
|
Mozal Aluminium
|
|
|
|
|
|
|
Aluminium (US$/t)
|
2,377
|
2,610
|
2,805
|
18%
|
7%
|
|
Sierra Gorda (non-operated)15(a)
|
|
|
|
|
|
|
Payable copper (US$/lb)
|
3.56
|
4.19
|
3.83
|
8%
|
(9%)
|
|
Payable molybdenum
(US$/lb)
|
20.82
|
20.35
|
21.68
|
4%
|
6%
|
|
Payable gold (US$/oz)
|
1,957
|
2,342
|
2,593
|
32%
|
11%
|
|
Payable silver (US$/oz)
|
23.3
|
26.3
|
31.5
|
35%
|
20%
|
|
Cannington15
|
|
|
|
|
|
|
Payable silver (US$/oz)
|
22.5
|
27.5
|
29.4
|
31%
|
7%
|
|
Payable lead (US$/t)
|
1,979
|
2,031
|
1,823
|
(8%)
|
(10%)
|
|
Payable zinc (US$/t)
|
2,085
|
2,358
|
2,739
|
31%
|
16%
|
|
Cerro Matoso16
|
|
|
|
|
|
|
Payable nickel (US$/lb)
|
6.00
|
6.30
|
6.12
|
2%
|
(3%)
|
|
Australia Manganese17
|
|
|
|
|
|
|
Manganese ore (US$/dmtu,
FOB)
|
3.79
|
3.71
|
-
|
-
|
-
|
|
South Africa Manganese17
|
|
|
|
|
|
|
Manganese ore (US$/dmtu,
FOB)
|
3.03
|
4.05
|
3.85
|
27%
|
(5%)
|
|
Illawarra Metallurgical Coal13
|
|
|
|
|
|
|
Metallurgical coal
(US$/t)
|
276
|
275
|
223
|
(19%)
|
(19%)
|
|
Energy coal (US$/t)
|
101
|
113
|
91
|
(10%)
|
(19%)
|
a. While
Brazil Alumina and Brazil Aluminium are non-operated, South32 owns
the marketing rights for our share of production. While Sierra
Gorda is also non-operated, the Joint Venture is responsible for
marketing our share of production.
OPERATING UNIT COST
UPDATE
While we achieved a number of strong
production results and realised improved commodity prices in H1
FY25 that are expected to increase Group operating margins,
compared to the prior period, our Operating unit costs in H1 FY25
are expected to reflect the impact of higher raw material input
costs in our aluminium value chain. Looking forward, our Operating
unit costs in H2 FY25 are expected to benefit from weaker producer
currencies.
The below commentary reflects our
current expectations for H1 FY25 Operating unit costs. We will
report H1 FY25 Operating unit costs and provide updated FY25
guidance with our H1 FY25 results announcement.
|
Operating unit cost(a)
|
|
|
|
|
Current
Guidance FY25e(b)(c)
|
H1 FY25 Operating unit cost
commentary
|
|
|
|
Worsley Alumina
|
|
|
|
(US$/t)
|
290
|
Expected to be ~5% above current
FY25 guidance due to higher caustic soda costs.
|
|
Brazil Alumina (non-operated)
|
|
|
|
|
Not
provided
|
Expected to be largely in-line with
H2 FY24 Operating unit costs (US$320/t).
|
|
Brazil Aluminium (non-operated)
|
|
|
|
Not
provided
|
Expected to be ~5% above H2 FY24
Operating unit
costs
(US$3,160/t) due to higher alumina prices.
|
|
Hillside Aluminium
|
Not
provided
|
|
|
|
The cost profile of our South
African aluminium smelters is heavily influenced by the South
African rand, and the price of raw materials and energy.
H1 FY25 Operating unit costs for
Hillside Aluminium and Mozal Aluminium are expected to be ~10%
above H2 FY24 (US$2,097/t and US$2,238/t, respectively) due to a
stronger South African rand and higher alumina prices.
|
|
Mozal Aluminium
|
|
|
|
Sierra Gorda (non-operated)
|
|
|
|
(US$/t)(d)
|
16.0
|
Expected to be ~10% above current
FY25 guidance, notwithstanding strong operating performance, due to
a drawdown of finished goods inventory in H1 FY25.
|
|
Cannington
|
|
|
|
(US$/t)(d)
|
170
|
Expected to be ~15% above current
FY25 guidance due to lower ore processed, with processed volumes
weighted to H2 FY25.
|
|
Cerro Matoso
|
|
|
|
(US$/lb)
|
5.65
|
Expected to be ~10% below current
FY25 guidance due to further cost efficiencies, and lower
price-linked royalties.
|
|
South Africa Manganese
|
|
|
|
(US$/dmtu FOB)
|
3.00
|
Expected to be ~5% above current FY25 guidance due to a stronger South
African rand, partially offset by lower price-linked
royalties.
|
|
|
|
| |
a. Operating
unit cost is Revenue less Underlying EBITDA, excluding third party
sales, divided by sales volumes.
b. FY25e
Operating unit cost guidance includes royalties (where appropriate)
and commodity price and foreign exchange rate forward curves or our
internal expectations (refer to footnote 18).
c. The
denotation (e) refers to an estimate or forecast year.
d. US dollar
per tonne of ore processed. Periodic movements in finished product
inventory may impact Operating unit costs.
WORSLEY ALUMINA (86%
SHARE)
|
South32 share
|
1H24
|
1H25
|
HoH
|
|
2Q24
|
1Q25
|
2Q25
|
2Q25
vs
2Q24
|
2Q25
vs
1Q25
|
|
Alumina production (kt)
|
1,934
|
1,850
|
(4%)
|
|
962
|
850
|
1,000
|
4%
|
18%
|
|
Alumina sales (kt)
|
1,898
|
1,789
|
(6%)
|
|
985
|
824
|
965
|
(2%)
|
17%
|
Worsley Alumina saleable production
decreased by 4% (or 84kt) to 1,850kt in the December 2024 half
year, primarily due to constrained bauxite supply as a result of
delayed approvals for new mining areas. Production improved by 18%
(or 150kt) in the December 2024 quarter following the completion of
planned calciner maintenance in the September 2024 quarter. FY25
production guidance remains unchanged at 3,750kt. Further planned
calciner maintenance is scheduled for the March 2025
quarter.
Sales increased by 17% in the
December 2024 quarter due to improved product availability. We
realised a ~11% discount to the Platts
Alumina index19 for alumina
sales in the December 2024 half year, which reflected market based
prices except for a legacy supply contract with Mozal Aluminium
which is linked to the LME aluminium price.
On 20 December 2024, the Western
Australian Minister for Environment approved the Worsley Mine
Development Project3 (the
Project), subject to conditions. We remain
on track to receive Federal approval for the Project in the March
2025 quarter.
BRAZIL ALUMINA (36% SHARE,
NON-OPERATED)
|
South32 share
|
1H24
|
1H25
|
HoH
|
|
2Q24
|
1Q25
|
2Q25
|
2Q25
vs
2Q24
|
2Q25
vs
1Q25
|
|
Alumina production (kt)
|
640
|
682
|
7%
|
|
322
|
334
|
348
|
8%
|
4%
|
|
Alumina sales (kt)
|
647
|
691
|
7%
|
|
375
|
326
|
365
|
(3%)
|
12%
|
Brazil Alumina saleable production
increased by 7% (or 42kt) to 682kt in the
December 2024 half year as the refinery benefitted from improved
plant availability. FY25 production guidance remains unchanged at
1,350kt.
During the December 2024 quarter,
the joint venture partners of MRN made a final investment decision
to construct a transmission line to connect the MRN bauxite mine to
the Brazilian power grid. The transmission line will enable MRN to
reduce operating costs by replacing its diesel-powered generation
with cost efficient renewable energy sources, and support the
future development of the West Zone mine life extension project.
Our share of capital expenditure for the transmission line is
expected to be ~US$70M (33% share) over FY25 to
FY27.
BRAZIL ALUMINIUM (40% SHARE,
NON-OPERATED)
|
South32 share
|
1H24
|
1H25
|
HoH
|
|
2Q24
|
1Q25
|
2Q25
|
2Q25
vs
2Q24
|
2Q25
vs
1Q25
|
|
Aluminium production (kt)
|
50
|
64
|
28%
|
|
26
|
30
|
34
|
31%
|
13%
|
|
Aluminium sales (kt)
|
40
|
61
|
53%
|
|
32
|
25
|
36
|
13%
|
44%
|
Brazil Aluminium saleable production
increased by 28% (or 14kt) to 64kt in the December 2024 half year
as the smelter continued to ramp-up all three potlines. FY25
production guidance remains unchanged at 130kt.
HILLSIDE ALUMINIUM (100%
SHARE)
|
South32 share
|
1H24
|
1H25
|
HoH
|
|
2Q24
|
1Q25
|
2Q25
|
2Q25
vs
2Q24
|
2Q25
vs
1Q25
|
|
Aluminium production (kt)
|
359
|
362
|
1%
|
|
179
|
180
|
182
|
2%
|
1%
|
|
Aluminium sales (kt)
|
327
|
367
|
12%
|
|
157
|
175
|
192
|
22%
|
10%
|
Hillside Aluminium saleable
production increased by 1% (or
3kt) to 362kt in the December 2024 half year as
the smelter continued to test its maximum technical capacity,
despite the impact of load-shedding. FY25 production guidance
remains unchanged at 720kt12.
Sales increased by 10% in the
December 2024 quarter as our inventory position returned to
normalised levels.
MOZAL ALUMINIUM (63.7%
SHARE)
|
South32 share
|
1H24
|
1H25
|
HoH
|
|
2Q24
|
1Q25
|
2Q25
|
2Q25
vs
2Q24
|
2Q25
vs
1Q25
|
|
Aluminium production (kt)
|
166
|
178
|
7%
|
|
82
|
88
|
90
|
10%
|
2%
|
|
Aluminium sales (kt)
|
167
|
174
|
4%
|
|
90
|
86
|
88
|
(2%)
|
2%
|
Mozal Aluminium saleable production
increased by 7% (or 12kt) to 178kt in the December 2024 half year
as the smelter approached nameplate capacity following completion
of its operational recovery plan, despite the impact of
load-shedding.
In December 2024, the transport of
raw materials to the smelter was disrupted by road blockages due to
civil unrest in Mozambique1. We
subsequently reduced amperage to the potlines20, reducing aluminium production capacity by
approximately 3%, to preserve raw materials and maintain
operational stability.
In recent weeks, we have re-built
alumina stocks at the smelter as we successfully implemented
contingency plans and road blockages eased. While Mozal Aluminium
has continued to operate and export aluminium to customers during
this period, any escalation in civil unrest has the potential to
impact our critical trucking activity and operations.
Accordingly, production guidance remains withdrawn as we monitor
and respond to the evolving situation.
As previously disclosed, we continue
to work with Eskom and the Government of the Republic of Mozambique
to extend the smelter's hydro-electric power supply beyond March
2026, as there are currently no viable alternative suppliers of
renewable energy at the required scale.
SIERRA GORDA (45% SHARE)
|
South32 share
|
1H24
|
1H25
|
HoH
|
|
2Q24
|
1Q25
|
2Q25
|
2Q25
vs
2Q24
|
2Q25
vs
1Q25
|
|
Payable copper equivalent production
(kt)4
|
38.4
|
46.4
|
21%
|
|
18.3
|
22.1
|
24.3
|
33%
|
10%
|
|
Payable copper production
(kt)
|
31.6
|
36.7
|
16%
|
|
15.6
|
17.6
|
19.1
|
22%
|
9%
|
|
Payable copper sales (kt)
|
32.5
|
37.9
|
17%
|
|
17.2
|
17.9
|
20.0
|
16%
|
12%
|
Sierra Gorda payable copper
equivalent production4
increased by 21% (or 8.0kt) to 46.4kt in the
December 2024 half year, with higher planned copper grades
and a significant increase in molybdenum recoveries due to improved
ore quality. FY25 production guidance remains
unchanged at 84.8kt payable copper equivalent (copper 70.0kt,
molybdenum 1.3kt, gold 25.0koz and silver
550koz).
Sierra Gorda continued additional
engineering and study work for the fourth grinding line expansion
during the December 2024 quarter. A feasibility study and final
investment decision by the joint venture partners is expected in
the second half of calendar year 2025.
CANNINGTON (100% SHARE)
|
South32 share
|
1H24
|
1H25
|
HoH
|
|
2Q24
|
1Q25
|
2Q25
|
2Q25
vs
2Q24
|
2Q25
vs
1Q25
|
|
Payable zinc equivalent production
(kt)5
|
156.3
|
129.9
|
(17%)
|
|
81.6
|
50.7
|
79.2
|
(3%)
|
56%
|
|
Payable silver production
(koz)
|
6,704
|
5,615
|
(16%)
|
|
3,474
|
1,915
|
3,700
|
7%
|
93%
|
|
Payable silver sales
(koz)
|
6,529
|
5,469
|
(16%)
|
|
3,656
|
2,342
|
3,127
|
(14%)
|
34%
|
|
Payable lead production
(kt)
|
58.8
|
49.6
|
(16%)
|
|
30.3
|
19.3
|
30.3
|
0%
|
57%
|
|
Payable lead sales (kt)
|
56.6
|
54.3
|
(4%)
|
|
31.0
|
25.1
|
29.2
|
(6%)
|
16%
|
|
Payable zinc production
(kt)
|
29.0
|
22.9
|
(21%)
|
|
15.8
|
12.1
|
10.8
|
(32%)
|
(11%)
|
|
Payable zinc sales (kt)
|
28.3
|
23.0
|
(19%)
|
|
14.4
|
12.6
|
10.4
|
(28%)
|
(17%)
|
Cannington payable zinc equivalent
production5 decreased by 17% (or 26.4kt) to
129.9kt in the December 2024 half year as
the operation continued to manage increased underground activity
and complexity. Ore mined and plant throughput increased by 28% and
23%, respectively, in the December 2024 quarter, following the
completion of additional dewatering in the prior quarter. This
improved plant throughput, together with higher planned lead and
silver grades, supported a 56% increase in payable zinc equivalent
production in the December 2024 quarter.
FY25 production guidance remains
unchanged at 265.4kt payable zinc equivalent (silver 11,300koz,
lead 100.0kt and zinc 50.0kt).
CERRO MATOSO (99.9%
SHARE)
|
South32 share
|
1H24
|
1H25
|
HoH
|
|
2Q24
|
1Q25
|
2Q25
|
2Q25
vs
2Q24
|
2Q25
vs
1Q25
|
|
Payable nickel production
(kt)
|
18.3
|
18.5
|
1%
|
|
10.0
|
8.6
|
9.9
|
(1%)
|
15%
|
|
Payable nickel sales (kt)
|
18.0
|
17.7
|
(2%)
|
|
9.5
|
8.8
|
8.9
|
(6%)
|
1%
|
Cerro Matoso payable nickel
production increased by 1% (or 0.2kt) to 18.5kt in the December 2024 half year, while production
improved by 15% (or 1.3kt) in the December 2024 quarter due to
higher plant utilisation. FY25 production guidance
remains unchanged at 35.0kt.
We continued to progress our
strategic review of Cerro Matoso and will provide an update with
our H1 FY25 results announcement.
AUSTRALIA MANGANESE (60%
SHARE)
|
South32 share
|
1H24
|
1H25
|
HoH
|
|
2Q24
|
1Q25
|
2Q25
|
2Q25
vs
2Q24
|
2Q25
vs
1Q25
|
|
Manganese ore production
(kwmt)
|
1,679
|
639
|
N/A
|
|
789
|
-
|
639
|
N/A
|
N/A
|
|
Manganese ore sales
(kwmt)
|
1,864
|
-
|
N/A
|
|
924
|
-
|
-
|
N/A
|
N/A
|
Australia Manganese continued to
implement its operational recovery plan following the impacts of
Tropical Cyclone Megan in the March 2024 quarter.
We continued a substantial
dewatering program which has enabled access to certain mining pits
and a phased restart of mining activities. We resumed production
from the primary concentrator as planned in the December 2024
quarter with saleable production of 639kwmt. FY25 production
guidance remains unchanged at 1,000kwmt, with production expected
to continue at limited rates in the second half of FY25 as we
progress the recovery plan and complete further
dewatering.
Construction of a critical bridge
that connects the northern pits of the Western Leases mining area
and the processing plant progressed as planned in the December 2024
quarter and remains on track to be completed in the March 2025
quarter.
During the December 2024 quarter, we
progressed the demolition of undersea structures, and commenced
installing the pilings for the new wharf. While we have experienced
some weather related delays, a second jack-up barge has arrived on
site and is expected to improve the productivity of the pilings
installation.
Subject to further potential impacts
from the wet season, export sales are expected to
progressively increase over the June 2025
quarter.
SOUTH AFRICA MANGANESE (ORE 54.6%
SHARE)
|
South32 share
|
1H24
|
1H25
|
HoH
|
|
2Q24
|
1Q25
|
2Q25
|
2Q25
vs
2Q24
|
2Q25
vs
1Q25
|
|
Manganese ore production
(kwmt)
|
1,111
|
1,082
|
(3%)
|
|
483
|
597
|
485
|
0%
|
(19%)
|
|
Manganese ore sales
(kwmt)
|
1,082
|
1,088
|
1%
|
|
564
|
590
|
498
|
(12%)
|
(16%)
|
South Africa Manganese saleable
production decreased by 3% (or 29kwmt) to
1,082kwmt in the December 2024 half year,
as we reduced our use of higher cost trucking and
undertook a temporary shut at our Wessels mine in the December 2024
quarter, in response to market conditions.
While FY25 production guidance remains
unchanged at 2,000kwmt, we will continue to monitor and respond to
market conditions.
NOTES
|
1.
|
Refer to market release "Mozal
Aluminium Update" dated 10 December 2024.
|
|
2.
|
Refers to aluminium produced in a
process that results in less than 4t CO2-e Scope 1 and
Scope 2 greenhouse gas (GHG) emissions per tonne of
aluminium.
|
|
3.
|
Refer to market release "Worsley
Mine Development Project Receives State Approval" dated 20 December
2024.
|
|
4.
|
Payable copper equivalent production
(kt) was calculated by aggregating revenues from copper,
molybdenum, gold and silver, and dividing the total Revenue by the
price of copper. FY24 realised prices for copper (US$3.86/lb),
molybdenum (US$20.60/lb), gold (US$2,129/oz) and silver
(US$24.8/oz) have been used for FY24, H1 FY25 and FY25e.
|
|
5.
|
Payable zinc equivalent production
(kt) was calculated by aggregating revenues from payable silver,
lead and zinc, and dividing the total Revenue by the price of zinc.
FY24 realised prices for zinc (US$2,230/t), lead (US$2,002/t) and
silver (US$24.8/oz) have been used for FY24, H1 FY25 and
FY25e.
|
|
6.
|
Refer to media release "South32
Invests in American Eagle Gold" dated 11 November 2024.
|
|
7.
|
On 29 August 2024, we completed the
sale of Illawarra Metallurgical Coal (the Transaction) to an entity
owned by Golden Energy and Resources Pte Ltd and M Resources Pty
Ltd, receiving upfront cash proceeds of US$964M. The upfront cash
consideration comprised of US$1,050M less the already received
deposit (US$40M) and a provisional adjustment for working capital,
net debt and capital expenditure (US$46M). A final adjustment to
the purchase price is now expected to be determined in the March
2025 quarter. The total Transaction consideration includes deferred
cash consideration of US$250M, payable in March 2030, and
contingent price-linked cash consideration of up to
US$350M.
|
|
8.
|
Net distributions from our material
equity accounted investments (EAI) (manganese and Sierra Gorda)
includes dividends, capital contributions and net
repayments/drawdowns of shareholder loans, which are unaudited and
should not be considered as an indication of or alternative to an
IFRS measure of profitability, financial performance or
liquidity.
|
|
9.
|
Since inception of our capital
management program, US$1.8B has been allocated to our on-market
share buy-back (806M shares at an average price of A$3.06 per
share) and US$525M returned in the form of special
dividends.
|
|
10.
|
The corporate tax rates of the
geographies where the Group operates include: Australia 30%, South
Africa 27%, Colombia 35%, Mozambique 0%, Brazil 34%, and Chile 27%.
The Mozambique operations are subject to a royalty on revenues
instead of income tax.
|
|
11.
|
Australia Manganese is subject to a
royalty related tax equal to 20% of adjusted EBIT. Sierra Gorda is
subject to a royalty related tax based on the amount of copper sold
and the mining operating margin, the rate is between 5% and 14% for
annual sales over 50kt of refined copper. These royalties are
included in Underlying tax expense.
|
|
12.
|
Production guidance for Hillside
Aluminium does not assume any load-shedding impact on
production.
|
|
13.
|
Reflects the period from 1 July 2024
to completion of the Transaction on 29 August 2024.
|
|
14.
|
Realised prices are unaudited.
Volumes and prices do not include any third party trading that may
be undertaken independently of equity production. Realised sales
price is calculated as sales Revenue divided by sales volume unless
otherwise stated.
|
|
15.
|
Realised prices for Sierra Gorda and
Cannington are net of treatment and refining charges.
|
|
16.
|
Realised nickel sales prices are
inclusive of by-products.
|
|
17.
|
Realised ore prices are calculated
as external sales Revenue less freight and marketing costs, divided
by external sales volume.
|
|
18.
|
FY25 Operating unit cost guidance
includes royalties (where appropriate) and the influence of
exchange rates, and includes various assumptions for FY25,
including: an alumina price of US$480/t; a manganese ore price of
US$7.80/dmtu for 44% manganese product; a nickel price of
US$7.50/lb; a silver price of US$27.8/oz; a lead price of
US$2,070/t (gross of treatment and refining charges); a zinc price
of US$2,750/t (gross of treatment and refining charges); a copper
price of US$4.40/lb (gross of treatment and refining charges); a
molybdenum price of US$17.50/lb (gross of treatment and refining
charges); a gold price of US$2,300/oz; an AUD:USD exchange rate of
0.65; a USD:ZAR exchange rate of 18.50; a USD:COP exchange rate of
4,100; USD:CLP exchange rate of 900; and a reference price for
caustic soda; which reflect forward markets as at August 2024 or
our internal expectations.
|
|
19.
|
The sales volume weighted average of
the Platts Alumina index (FOB) on the basis of a one-month lag to
published pricing (Month minus one or "M-1") was US$577/t in the
December 2024 half year.
|
|
20.
|
Refer to market release "Mozal
Aluminium Update" dated 19 December 2024.
|
|
21.
|
Illawarra Metallurgical Coal sales
are adjusted for moisture and will not reconcile directly to
Illawarra Metallurgical Coal production.
|
The following abbreviations have
been used throughout this report: US$ million (US$M); US$ billion
(US$B); grams per tonne (g/t); tonnes (t); thousand tonnes (kt);
thousand tonnes per annum (ktpa); million tonnes (Mt); million
tonnes per annum (Mtpa); ounces (oz); thousand ounces (koz);
million ounces (Moz); thousand wet metric tonnes (kwmt); million
wet metric tonnes (Mwmt); million wet metric tonnes per annum (Mwmt
pa); dry metric tonne unit (dmtu); thousand dry metric tonnes
(kdmt); Mineração Rio do Norte (MRN).
Figures in Italics indicate that an
adjustment has been made since the figures were previously
reported. The denotation (e) refers to an estimate or forecast
year.
OPERATING PERFORMANCE
|
South32 share
|
1H24
|
1H25
|
|
2Q24
|
3Q24
|
4Q24
|
1Q25
|
2Q25
|
|
Worsley Alumina (86% share)
|
|
|
|
|
|
|
|
|
|
Alumina hydrate production
(kt)
|
1,934
|
1,872
|
|
961
|
926
|
919
|
932
|
940
|
|
Alumina production (kt)
|
1,934
|
1,850
|
|
962
|
927
|
916
|
850
|
1,000
|
|
Alumina sales (kt)
|
1,898
|
1,789
|
|
985
|
895
|
974
|
824
|
965
|
|
Brazil Alumina (36% share)
|
|
|
|
|
|
|
|
|
|
Alumina production (kt)
|
640
|
682
|
|
322
|
313
|
333
|
334
|
348
|
|
Alumina sales (kt)
|
647
|
691
|
|
375
|
277
|
358
|
326
|
365
|
|
Brazil Aluminium (40% share)
|
|
|
|
|
|
|
|
|
|
Aluminium production (kt)
|
50
|
64
|
|
26
|
26
|
28
|
30
|
34
|
|
Aluminium sales (kt)
|
40
|
61
|
|
32
|
32
|
30
|
25
|
36
|
|
Hillside Aluminium (100% share)
|
|
|
|
|
|
|
|
|
|
Aluminium production (kt)
|
359
|
362
|
|
179
|
181
|
180
|
180
|
182
|
|
Aluminium sales (kt)
|
327
|
367
|
|
157
|
209
|
184
|
175
|
192
|
|
Mozal Aluminium (63.7% share)
|
|
|
|
|
|
|
|
|
|
Aluminium production (kt)
|
166
|
178
|
|
82
|
71
|
77
|
88
|
90
|
|
Aluminium sales (kt)
|
167
|
174
|
|
90
|
58
|
101
|
86
|
88
|
|
Sierra Gorda (45% share)
|
|
|
|
|
|
|
|
|
|
Ore mined (Mt)
|
11.9
|
12.6
|
|
6.0
|
3.1
|
4.9
|
6.4
|
6.2
|
|
Ore processed (Mt)
|
10.9
|
11.1
|
|
5.4
|
5.5
|
5.5
|
5.6
|
5.5
|
|
Copper ore grade processed (%,
Cu)
|
0.37
|
0.42
|
|
0.38
|
0.34
|
0.37
|
0.41
|
0.44
|
|
Payable copper equivalent production
(kt)4
|
38.4
|
46.4
|
|
18.3
|
16.7
|
18.4
|
22.1
|
24.3
|
|
Payable copper production
(kt)
|
31.6
|
36.7
|
|
15.6
|
13.9
|
15.3
|
17.6
|
19.1
|
|
Payable copper sales (kt)
|
32.5
|
37.9
|
|
17.2
|
13.1
|
15.3
|
17.9
|
20.0
|
|
Payable molybdenum production
(kt)
|
0.5
|
0.9
|
|
0.1
|
0.2
|
0.2
|
0.4
|
0.5
|
|
Payable molybdenum sales
(kt)
|
0.7
|
0.7
|
|
0.3
|
0.4
|
0.2
|
0.2
|
0.5
|
|
Payable gold production
(koz)
|
13.4
|
15.9
|
|
7.1
|
5.3
|
5.9
|
7.7
|
8.2
|
|
Payable gold sales (koz)
|
13.8
|
16.2
|
|
7.5
|
5.2
|
5.9
|
7.8
|
8.4
|
|
Payable silver production
(koz)
|
295
|
301
|
|
150
|
153
|
159
|
151
|
150
|
|
Payable silver sales
(koz)
|
300
|
317
|
|
160
|
141
|
164
|
157
|
160
|
|
South32 share
|
1H24
|
1H25
|
|
2Q24
|
3Q24
|
4Q24
|
1Q25
|
2Q25
|
|
Cannington (100% share)
|
|
|
|
|
|
|
|
|
|
Ore mined (kwmt)
|
1,150
|
999
|
|
599
|
529
|
573
|
438
|
561
|
|
Ore processed (kdmt)
|
1,139
|
982
|
|
577
|
525
|
557
|
440
|
542
|
|
Silver ore grade processed (g/t,
Ag)
|
211
|
206
|
|
216
|
200
|
199
|
163
|
241
|
|
Lead ore grade processed (%,
Pb)
|
6.0
|
5.9
|
|
6.2
|
5.6
|
5.9
|
5.1
|
6.5
|
|
Zinc ore grade processed (%,
Zn)
|
3.4
|
3.2
|
|
3.6
|
3.8
|
4.1
|
3.7
|
2.8
|
|
Payable zinc equivalent production
(kt)5
|
156.3
|
129.9
|
|
81.6
|
68.8
|
77.3
|
50.7
|
79.2
|
|
Payable silver production
(koz)
|
6,704
|
5,615
|
|
3,474
|
2,897
|
3,065
|
1,915
|
3,700
|
|
Payable silver sales
(koz)
|
6,529
|
5,469
|
|
3,656
|
2,210
|
3,054
|
2,342
|
3,127
|
|
Payable lead production
(kt)
|
58.8
|
49.6
|
|
30.3
|
24.8
|
28.8
|
19.3
|
30.3
|
|
Payable lead sales (kt)
|
56.6
|
54.3
|
|
31.0
|
17.9
|
27.9
|
25.1
|
29.2
|
|
Payable zinc production
(kt)
|
29.0
|
22.9
|
|
15.8
|
14.3
|
17.4
|
12.1
|
10.8
|
|
Payable zinc sales (kt)
|
28.3
|
23.0
|
|
14.4
|
11.6
|
20.2
|
12.6
|
10.4
|
|
Cerro Matoso (99.9% share)
|
|
|
|
|
|
|
|
|
|
Ore mined (kwmt)
|
2,183
|
2,648
|
|
1,243
|
1,486
|
1,526
|
1,338
|
1,310
|
|
Ore processed (kdmt)
|
1,317
|
1,396
|
|
723
|
711
|
746
|
664
|
732
|
|
Ore grade processed (%,
Ni)
|
1.55
|
1.48
|
|
1.53
|
1.61
|
1.70
|
1.46
|
1.49
|
|
Payable nickel production
(kt)
|
18.3
|
18.5
|
|
10.0
|
10.8
|
11.5
|
8.6
|
9.9
|
|
Payable nickel sales (kt)
|
18.0
|
17.7
|
|
9.5
|
10.8
|
12.1
|
8.8
|
8.9
|
|
Australia Manganese (60% share)
|
|
|
|
|
|
|
|
|
|
Manganese ore production
(kwmt)
|
1,679
|
639
|
|
789
|
645
|
-
|
-
|
639
|
|
Manganese ore sales
(kwmt)
|
1,864
|
-
|
|
924
|
709
|
-
|
-
|
-
|
|
Ore grade sold (%, Mn)
|
42.6
|
-
|
|
42.2
|
42.2
|
-
|
-
|
-
|
|
South Africa Manganese (54.6% share)
|
|
|
|
|
|
|
|
|
|
Manganese ore production
(kwmt)
|
1,111
|
1,082
|
|
483
|
530
|
534
|
597
|
485
|
|
Manganese ore sales
(kwmt)
|
1,082
|
1,088
|
|
564
|
485
|
549
|
590
|
498
|
|
Ore grade sold (%, Mn)
|
38.7
|
39.0
|
|
38.4
|
38.7
|
39.1
|
38.9
|
39.1
|
|
Illawarra Metallurgical Coal (100%
share)13
|
|
|
|
|
|
|
|
|
|
Total coal production
(kt)
|
2,045
|
766
|
|
877
|
1,405
|
1,488
|
766
|
-
|
|
Total coal sales
(kt)21
|
2,096
|
540
|
|
900
|
1,238
|
1,537
|
540
|
-
|
|
Metallurgical coal production
(kt)
|
1,787
|
676
|
|
744
|
1,244
|
1,274
|
676
|
-
|
|
Metallurgical coal sales
(kt)
|
1,759
|
507
|
|
763
|
1,053
|
1,360
|
507
|
-
|
|
Energy coal production
(kt)
|
258
|
90
|
|
133
|
161
|
214
|
90
|
-
|
|
Energy coal sales (kt)
|
337
|
33
|
|
137
|
185
|
177
|
33
|
-
|
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. South32 cautions against reliance on any
forward-looking statements or guidance.
FURTHER INFORMATION
|
INVESTOR RELATIONS
Ben Baker
M +61 403 763 086
E
Ben.Baker@south32.net
|
MEDIA RELATIONS
Jamie Macdonald
M +61 408 925 140
E
Jamie.Macdonald@south32.net
|
Miles Godfrey
M +61 415 325 906
E
Miles.Godfrey@south32.net
|
Approved
for release to the market by Graham Kerr, Chief Executive
Officer
JSE Sponsor: The Standard Bank of South Africa Limited
20 January
2025
South32
Limited
(Incorporated in Australia under the Corporations Act 2001
(Cth))
(ACN 093
732 597)
ASX / LSE /
JSE Share Code: S32; ADR: SOUHY
ISIN:
AU000000S320