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SOUTH32 LIMITED - Samancor Manganese joint venture to delay restarting three furnaces at its metalloys manganese operation in SA

Release Date: 09/06/2015 09:00
Code(s): S32     PDF:  
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Samancor Manganese joint venture to delay restarting three furnaces at its metalloys manganese operation in SA

South32 Limited
(Incorporated in Australia under the Corporations Act, 2001)
(ACN 093 732 597)
JSE Share Code: S32
ISIN: AU000000S320
(“South32” or “the Company”)




SAMANCOR MANGANESE JOINT VENTURE TO DELAY RESTARTING THREE FURNACES
       AT ITS METALLOYS MANGANESE OPERATION IN SOUTH AFRICA

South32 Limited (ASX, LSE, JSE: S32) (South32): South32, in its capacity as manager of the
Samancor Manganese joint venture, announced today that the joint venture has made a decision
to delay the restart of three of the four high-carbon ferromanganese (HCFeMn) furnaces at its
                                       1
Metalloys manganese alloy operation in South Africa.

The decision follows a decline in HCFeMn alloy prices of approximately 20 per cent since the
start of the 2015 financial year and is aligned with South32’s commitment to maximise per share
financial performance, rather than volume. No permanent employees will be retrenched as a
result of this temporary suspension.

Following this decision, the joint venture is engaging with Transnet to secure access to the
necessary rail and port capacity required to export additional manganese ore from its South
African mining operations; however, export volumes will remain dependent on market conditions.

South32 also confirms that a review of the fair value of its interest in the Samancor Manganese
joint venture is currently underway. The process is expected to have implications for the fair
                  2
value adjustment that is required pursuant to the conclusion of the Amended and Restated
Umbrella Agreement governing the joint venture.

Samancor Manganese is the world’s largest producer of manganese with operations in South
Africa and Australia. Its Australian operations include GEMCO, an open-cut manganese mine in
the Northern Territory, ranked as the largest and one of the world’s lowest cost manganese ore
producers, and TEMCO, a manganese alloy plant in Tasmania. The joint venture’s African
operations include the Hotazel Manganese Mines located in the Kalahari Basin in South Africa’s
Northern Cape Province, a region that holds 80 per cent of the world’s manganese resource
endowment. Its African operations also include Metalloys, a smelter that is integrated with the
Hotazel Manganese Mines, creating an alternative logistical route for manganese into the export
markets.

1
   Metalloys, one of the largest manganese smelters in the world, is owned by Samancor
Manganese, a 60:40 joint venture between South32 and Anglo American.
2
  On 19 August 2014, BHP Billiton announced that it had agreed with Anglo American to make
certain changes to the agreement which governs their interests in the Samancor Manganese
joint venture. On completion, BHP Billiton subsequently discontinued consolidation of the
manganese business and recorded its retained 60 per cent interest at fair value.


Registered Office: Level 35, 108 St Georges Terrace Perth Western Australia 6000 Australia
ABN 84 093 732 597 Registered in Australia
9 June 2015

Sponsor: UBS South Africa (Pty) Ltd

Media Relations                                 Investor Relations

Steven Blaney                                   Peter Harris
+61 8 9324 9049                                 +61 8 9324 9046
+61 (0) 487 349 548                             +61 (0) 476 559 190
Steven.Blaney@south32.net                       Peter.Harris3@south32.net


Jill Thomas
+61 8 9324 9181
+61 (0) 423 259 190
Jill.Thomas@south32.net




Further information on South32 Limited can be found at: www.South32.net.

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