Wrap Text
Quarterly Report December 2018
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
South32.net
Quarterly Report
December 2018
• FY19 production guidance remains unchanged for all “We achieved a strong quarter of production,
operations with the exception of Illawarra Metallurgical Coal maintaining full year guidance for all operations
where improved longwall performance has underpinned a with the exception of Illawarra Metallurgical Coal
7% increase to our prior estimate. where improved longwall performance has
underpinned a seven per cent increase to our prior
• Achieved record ore production at Australia Manganese in estimate.
the December 2018 half year as the primary circuit
maintained high utilisation rates and the PC02 circuit “We achieved record production at Australia
operated at 120% of design capacity. Manganese as our PC02 circuit continued to exceed
its design capacity, delivering additional tonnes
• Increased premium ore production at South Africa into a strong market
Manganese, partially offsetting a decline in fine grained
secondary products. “Our plans to transform the ownership of South
Africa Energy Coal remain on track, with binding
• Benefitted from improved calciner availability and the bids expected in the June 2019 half year.
opportunistic sale of three shipments of stockpiled hydrate
with saleable production increasing by 23% at Worsley “As we have benefitted from strong prices for our
Alumina in the December 2018 quarter core commodities we have continued to return cash
to shareholders. In the December 2018 half year we
• Maintained saleable aluminium production despite an distributed US$316M in dividends and allocated
increase in the frequency of load-shedding events at US$167M to our on-market share buy-back.”
Hillside Aluminium and Mozal Aluminium during the
December 2018 half year.
Graham Kerr, South32 CEO
• Finalised plans for the Klipspruit dragline to return to
service by the end of January 2019, enabling a strong
recovery in export volumes at South Africa Energy Coal in
the June 2019 half year.
Production summary
South32’s share 1H18 1H19 HoH 2Q18 1Q19 2Q19 QoQ
Alumina production (kt) 2,541 2,542 0% 1,262 1,159 1,383 19%
Aluminium production (kt) 495 495 0% 246 248 247 (0%)
Energy coal production (kt) 14,001 12,929 (8%) 6,987 6,560 6,369 (3%)
Metallurgical coal production (kt) 1,282 3,082 140% 788 1,515 1,567 3%
Manganese ore production (kwmt) 2,830 2,886 2% 1,526 1,447 1,439 (1%)
Manganese alloy production (kt) 118 109 (8%) 62 52 57 10%
Payable nickel production (kt) 21.8 21.1 (3%) 10.1 10.7 10.4 (3%)
Payable silver production (koz) 5,175 6,067 17% 2,412 3,185 2,882 (10%)
Payable lead production (kt) 49.4 48.3 (2%) 23.6 25.8 22.5 (13%)
Payable zinc production (kt) 20.2 26.3 30% 9.2 13.2 13.1 (1%)
Unless otherwise noted: percentage variance relates to performance during the half year ended December 2018 compared with
the half year ended December 2017 (HoH) or the December 2018 quarter compared with the September 2018 quarter (QoQ);
production and sales volumes are reported on an attributable basis.
1
Corporate Update
• The process to transform the ownership of South Africa Energy Coal progressed in the December 2018 quarter with binding
bids expected in the June 2019 half year.
• We received net distributions[note 1] of US$262M (South32 share) from our manganese equity accounted investments (EAI)
during the December 2018 half year as achieved prices continued to reflect the respective ore indices[note 2].
• In accordance with our disciplined capital management framework we paid our US$316M final dividend in respect of FY18 in
October 2018 and purchased a further 68M shares for a cash consideration of US$167M during the December 2018 half year.
To 31 December 2018, we had completed 79% of our US$1B capital management program, having paid a US$154M special
dividend on 5 April 2018 and purchased 272M shares at a volume weighted average price of A$3.09 per share
through our on-market share buy-back.
• The primary corporate tax rates applicable to the Group include: Australia 30%, South Africa 28%, Colombia 34%[note 3],
Mozambique 0%[note 3] and Brazil 34%. The disproportionate effect of permanent differences can, however, impact the
Effective Tax Rate (ETR) of the Group when margins are compressed, or losses are incurred in specific jurisdictions given
these differential tax rates and intragroup agreements. For this reason, we now expect the Group’s ETR (excluding EAI)
for the December 2018 half year to increase to between 35% and 40%. This rate is expected to decline in the June 2019
half year, particularly if the alumina to aluminium price ratio falls from its currently elevated level. Separately,
the Group made tax payments totalling US$207M (excluding EAI) during the December 2018 half year.
Production guidance (South32’s share) FY18 1H19 FY19e Comments
Worsley Alumina
Alumina production (kt) 3,764 1,906 3,965
Brazil Alumina
Alumina production (kt) 1,304 636 1,355
Hillside Aluminium
Aluminium production (kt) 712 360 720
Mozal Aluminium
Aluminium production (kt) 271 135 269
South Africa Energy Coal[note 4]
Energy coal production (kt) 27,271 12,171 29,000
Domestic coal production (kt) 15,154 7,731 17,500
Export coal production (kt) 12,117 4,440 11,500
Illawarra Metallurgical Coal
Total coal production (kt) 4,244 3,840 up 6,500
Improved longwall performance with two
Metallurgical coal production (kt) 3,165 3,082 up 5,200
moves scheduled in the March 2019 quarter
Energy coal production (kt) 1,079 758 up 1,300
Australia Manganese
Manganese ore production (kwmt) 3,396 1,811 3,350 Subject to market demand
South Africa Manganese
Manganese ore production[note 5] (kwmt) 2,145 1,075 2,050 Subject to market demand
Cerro Matoso
Payable nickel production (kt) 43.8 21.1 40.5
Cannington
Payable zinc equivalent production[note 6](kt) 187.2 95.2 188.1
Payable silver production (koz) 12,491 6,067 11,750
Payable lead production (kt) 104.4 48.3 98.0
Payable zinc production (kt) 41.3 26.3 51.0
The denotation (e) refers to an estimate or forecast year.
2
Marketing Update
1H19 1H19
Realised prices[note 7] 1H18 2H18 1H19 vs vs
1H18 2H18
Worsley Alumina
Alumina (US$/t) 354 429 457 29% 7%
Brazil Alumina
Alumina (US$/t) 370 449 504 36% 12%
Hillside Aluminium
Aluminium (US$/t) 2,134 2,313 2,144 0% (7%)
Mozal Aluminium
Aluminium (US$/t) 2,218 2,386 2,171 (2%) (9%)
South Africa Energy Coal
Domestic coal (US$/t) 24 25 22 (8%) (12%)
Export coal (US$/t) 76 82 83 9% 1%
Illawarra Metallurgical Coal
Metallurgical coal (US$/t) 189 211 207 10% (2%)
Energy coal (US$/t) 71 82 68 (4%) (17%)
Australia Manganese[note 8]
Manganese ore (US$/dmtu, FOB) 5.96 6.80 6.59 11% (3%)
South Africa Manganese[note 9]
Manganese ore (US$/dmtu, FOB) 4.57 5.90 5.85 28% (1%)
Cerro Matoso[note 10]
Payable nickel (US$/lb) 5.20 6.49 5.27 1% (19%)
Cannington
Payable silver (US$/oz) 16.8 16.4 14.7[note a] (13%) (10%)
Payable lead (US$/t) 2,517 2,409 1,625[note a] (35%) (33%)
Payable zinc (US$/t) 3,192 3,176 2,120[note a] (34%) (33%)
(a) H1 FY19 realised prices for Cannington reflect the Group’s adoption of AASB 15 Revenue from Contracts with
Customers, with revenue recognised net of treatment and refining charges, which will no longer be treated
as an expense item. These changes result in lower realised prices and Operating unit costs, with no
net impact to earnings. Prior period realised prices have not been restated to reflect these changes.
Development and Exploration Update
• We remain on track to declare a Mineral Resource [note 11] for the Hermosa project in accordance with the
JORC Code during the June 2019 half year.
• We completed our review of the Eagle Downs metallurgical coal project’s development plan during the December 2018 quarter
and commenced the feasibility study ahead of a final investment decision scheduled for H2 CY20.
• We invested US$26.9M in exploration programs during the December 2018 half year, of which US$10.6M was capitalised
(including US$0.9M for our EAI) and US$7.9M was directed to our portfolio of high quality, early stage greenfield
exploration
projects.
3
Worsley Alumina
(86% share)
2Q19 2Q19
South32's share 1H18 1H19 HoH 2Q18 1Q19 2Q19 vs vs
2Q18 1Q19
Alumina production (kt) 1,865 1,906 2% 923 854 1,052 14% 23%
Alumina sales (kt) 1,886 1,885 (0%) 920 850 1,035 13% 22%
Worsley Alumina saleable production increased by 2% (or 41kt) to 1,906kt in the December 2018 half year as the refinery
benefitted from improved calciner availability in the December 2018 quarter and three shipments of stockpiled hydrate were sold
opportunistically at alumina equivalent rates. FY19 production guidance remains unchanged at 3,965kt with calciner maintenance
scheduled for the March 2019 quarter.
The average realised price for alumina sales in the December 2018 half year was a discount of approximately 10% to the Platts
Alumina Index (PAX)[note 12] on a volume weighted M-1 basis. This discount reflects the structure of specific legacy supply
contracts with our Mozal Aluminium smelter that are linked to the LME aluminium price and the elevated alumina to aluminium price
ratio in the spot market. All alumina sales to other customers were at market based prices.
Brazil Alumina
(36% share)
2Q19 2Q19
South32's share 1H18 1H19 HoH 2Q18 1Q19 2Q19 vs vs
2Q18 1Q19
Alumina production (kt) 676 636 (6%) 339 305 331 (2%) 9%
Alumina sales (kt) 649 619 (5%) 316 302 317 0% 5%
Brazil Alumina saleable production decreased by 6% (or 40kt) to 636kt in the December 2018 half year as unplanned maintenance
and power outages impacted performance. FY19 production is expected to approach guidance of 1,355kt with the refinery anticipated
to creep production over the remainder of the year following the completion of the De-bottlenecking Phase One project in March
2018.
Hillside Aluminium
(100%)
2Q19 2Q19
South32's share 1H18 1H19 HoH 2Q18 1Q19 2Q19 vs vs
2Q18 1Q19
Aluminium production (kt) 358 360 1% 178 180 180 1% 0%
Aluminium sales (kt) 344 360 5% 182 178 182 0% 2%
Hillside Aluminium saleable production increased by 1% (or 2kt) to 360kt in the December 2018 half year as the smelter continued
to test its maximum technical capacity, despite an increase in the frequency of load-shedding events. FY19 production guidance
remains unchanged at 720kt.
Notwithstanding the smelter’s strong operating performance, a reduction in aluminium prices and still elevated alumina, pitch and
coke input costs are expected to result in a loss in the December 2018 half year.
4
Mozal Aluminium
(47.1% share)
2Q19 2Q19
South32's share 1H18 1H19 HoH 2Q18 1Q19 2Q19 vs vs
2Q18 1Q19
Aluminium production (kt) 137 135 (1%) 68 68 67 (1%) (1%)
Aluminium sales (kt) 147 129 (12%) 82 59 70 (15%) 19%
Mozal Aluminium saleable production decreased by 1% (or 2kt) to 135kt in the December 2018 half year as the smelter’s operating
performance was impacted by an increase in the frequency of load-shedding events. Aluminium sales decreased by 12% with the
scheduling of shipments between periods resulting in a temporary build of finished goods inventory during the
December 2018 half year. FY19 production guidance remains unchanged at 269kt.
Notwithstanding the smelters strong operating performance, higher prices for alumina and still elevated prices for pitch and coke
continue to impact its cost base and erode operating margin. 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 relief during the
December 2018 half year.
South Africa Energy Coal
(100%)
2Q19 2Q19
South32's share 1H18 1H19 HoH 2Q18 1Q19 2Q19 vs vs
2Q18 1Q19
Energy coal production (kt) 13,423 12,171 (9%) 6,734 6,170 6,001 (11%) (3%)
Domestic sales (kt) 7,334 7,749 6% 3,546 4,103 3,646 3% (11%)
Export sales (kt) 5,865 4,206 (28%) 3,117 1,923 2,283 (27%) 19%
South Africa Energy Coal saleable production decreased by 9% (or 1,252kt) to 12.2Mt in the December 2018 half year. Export
production was impacted by the dragline incident at Klipspruit in August 2018, while domestic production benefitted from the
commencement of a contract to sell lower quality stockpiled product in the June 2018 quarter.
FY19 production guidance remains unchanged at 29Mt (17.5Mt domestic, 11.5Mt Export), with the Klipspruit dragline expected to
return to service by the end of January, underpinning an increase in export volumes in the June 2019 half year. Domestic volumes
are also expected to benefit from a further increase in the sale of lower quality stockpiled product and implementation of a new
shift pattern at Khutala.
5
Illawarra Metallurgical Coal
(100%)
2Q19 2Q19
South32's share 1H18 1H19 HoH 2Q18 1Q19 2Q19 vs vs
2Q18 1Q19
Total coal production (kt) 1,860 3,840 106% 1,041 1,905 1,935 86% 2%
Total coal sales (kt) 1,660 3,259 96% 882 1,504 1,755 99% 17%
Metallurgical coal production (kt) 1,282 3,082 140% 788 1,515 1,567 99% 3%
Metallurgical coal sales (kt) 1,057 2,527 139% 654 1,178 1,349 106% 15%
Energy coal production (kt) 578 758 31% 253 390 368 45% (6%)
Energy coal sales (kt) 603 732 21% 228 326 406 78% 25%
Illawarra Metallurgical Coal saleable production increased by 106% (or 1,980kt) to 3.8Mt in the December 2018 half year as the
Dendrobium and Appin longwalls continued to perform strongly. Metallurgical coal stockpiles were also established during the
period in advance of two longwall moves scheduled for the March 2019 quarter.
We reached agreement with employees covered by the Dendrobium Mine Trades and Operators Enterprise Agreement during the
December 2018 quarter, having previously reached agreement with the Dendrobium and Appin Deputies. We continue to
renegotiate the remaining labour agreements at Illawarra Metallurgical Coal and this process is being closely managed.
FY19 production guidance has been increased by 7% to 6.5Mt, however a substantial uplift in development rates at Appin is
required to sustain the operation of two longwalls in parallel from H2 FY20. This uplift in production guidance is expected to
result in a commensurate reduction in our FY19 Operating unit cost guidance, on the basis of constant currency and price
assumptions.
Australia Manganese
(60% share)
2Q19 2Q19
South32's share 1H18 1H19 HoH 2Q18 1Q19 2Q19 vs vs
2Q18 1Q19
Manganese ore production (kwmt) 1,701 1,811 6% 893 932 879 (2%) (6%)
Manganese ore sales (kwmt) 1,612 1,740 8% 822 884 856 4% (3%)
Manganese alloy production (kt) 82 76 (7%) 43 41 35 (19%) (15%)
Manganese alloy sales (kt) 78 76 (3%) 42 29 47 12% 62%
Australia Manganese achieved record ore performance in the December 2018 half year, increasing saleable ore production by 6%
(or 110kwmt) to 1,811kwmt. 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. FY19 production
guidance remains unchanged at 3,350kwmt, with the wet season expected to impact production across the remainder of the
financial year.
Manganese alloy saleable production decreased by 7% (or 6kt) to 76kt in the December 2018 half year due to an unplanned
outage at one of the four furnaces during the December 2018 quarter. While the furnace has subsequently returned to service,
additional maintenance is planned for the June 2019 half year.
6
South Africa Manganese
(60% share)
2Q19 2Q19
South32's share 1H18 1H19 HoH 2Q18 1Q19 2Q19 vs vs
2Q18 1Q19
Manganese ore production (kwmt) 1,129 1,075 (5%) 633 515 560 (12%) 9%
Manganese ore sales (kwmt) 1,067 1,010 (5%) 539 487 523 (3%) 7%
Manganese alloy production (kt) 36 33 (8%) 19 11 22 16% 100%
Manganese alloy sales (kt) 28 35 25% 14 16 19 36% 19%
South Africa Manganese saleable ore production decreased by 5% (or 54kwmt) to 1,075kwmt in the December 2018 half year as
an increase in higher quality premium material was more than offset by a decline in fine grained secondary products. While FY19
production guidance remains unchanged at 2,050kwmt, we will continue to monitor market demand and optimise the use of higher
cost trucking.
Manganese alloy saleable production decreased by 8% (or 3kt) to 33kt in the December 2018 half year as a planned furnace
shutdown was completed.
Cerro Matoso
(99.9% share)
2Q19 2Q19
South32's share 1H18 1H19 HoH 2Q18 1Q19 2Q19 vs vs
2Q18 1Q19
Payable nickel production (kt) 21.8 21.1 (3%) 10.1 10.7 10.4 3% (3%)
Payable nickel sales (kt) 21.3 21.3 0% 9.9 10.9 10.4 5% (5%)
Cerro Matoso payable nickel production decreased by 3% (or 0.7kt) to 21.1kt in the December 2018 half year following a planned
increase in the contribution of lower grade stockpiled ore feed. FY19 production guidance remains unchanged at 40.5kt.
Cannington
(100% share)
2Q19 2Q19
South32's share 1H18 1H19 HoH 2Q18 1Q19 2Q19 vs vs
2Q18 1Q19
Payable zinc equivalent production (kt) 85.4 95.2 11% 40.0 49.7 45.5 14% (8%)
Payable silver production (koz) 5,175 6,067 17% 2,412 3,185 2,882 19% (10%)
Payable silver sales (koz) 5,429 6,340 17% 2,503 3,057 3,283 31% 7%
Payable lead production (kt) 49.4 48.3 (2%) 23.6 25.8 22.5 (5%) (13%)
Payable lead sales (kt) 48.6 47.1 (3%) 22.7 22.5 24.6 8% 9%
Payable zinc production (kt) 20.2 26.3 30% 9.2 13.2 13.1 42% (1%)
Payable zinc sales (kt) 25.7 24.7 (4%) 12.1 8.8 15.9 31% 81%
Cannington payable zinc equivalent production increased by 11% (or 9.8kt) to 95.2kt in the December 2018 half year as silver
and zinc grades improved in accordance with our expectations and mill throughput continued to track to plan. FY19 zinc
equivalent[note 6] production guidance remains unchanged at 188.1kt (silver 11,750koz, lead 98.0kt and zinc 51.0kt).
Finalisation adjustments and the provisional pricing of Cannington concentrates will decrease Underlying EBIT[note 13] by
US$9.8M in the December 2018 half year (US$0.1M FY18; US$5.5M H1 FY18). Outstanding concentrate sales (containing 2Moz of
silver, 25.3kt of lead and 6.2kt of zinc) were revalued at 31 December 2018. The final price of these sales will be determined in
the June 2019 half year.
7
Notes:
1. 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.
2. The quarterly sales volume weighted average on the basis of a one month lag to published pricing (Month minus one or “M-1”)
in the December 2018 half year was US$6.98/dmtu for the Metal Bulletin 44% manganese lump ore index (CIF Tianjin, China)
and US$5.91/dmtu for the Metal Bulletin 37% manganese lump ore index (FOB Port Elizabeth, South Africa).
3. The Colombian corporate tax rate was 40% until 31 December 2017. The Mozambique operations are subject to a royalty on
Revenue instead of income tax.
4. 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%.
5. Consistent with the presentation of South32’s segment information, South Africa Manganese ore 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.
6. Payable Zinc Equivalent (kt) is calculated by aggregating Revenue 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.
7. 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.
8. Realised ore prices are unaudited and calculated as external sales Revenue less freight and marketing costs, divided by
external sales volume. Ore converted to sinter and alloy, and sold externally, is eliminated as an intracompany transaction.
9. Realised ore prices are unaudited and calculated as external sales Revenue less freight and marketing costs, divided by
external sales volume. Ore converted to sinter and alloy, and sold externally, is eliminated as an intracompany transaction.
Manganese ore sales are grossed-up to reflect a 60% accounting effective interest.
10. Realised nickel sales prices are unaudited and inclusive of by-products.
11. 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.
12. 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$501/t in the December 2018 half year.
13. Underlying EBIT is earnings before net finance costs, taxation and any earnings adjustments. Underlying EBIT is reported
net of South32’s share of net finance costs and taxation of equity accounted investments.
14. The following abbreviations have been used throughout this report: US$ 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); thousand dry metric tonnes (kdmt).
8
Operating Performance
South32’s share 1H18 1H19 2Q18 3Q18 4Q18 1Q19 2Q19
Worsley Alumina (86% share)
Alumina hydrate production (kt) 1,947 1,947 973 938 911 959 988
Alumina production (kt) 1,865 1,906 923 918 981 854 1,052
Alumina sales (kt) 1,886 1,885 920 910 967 850 1,035
Brazil Alumina (36% share)
Alumina production (kt) 676 636 339 314 314 305 331
Alumina sales (kt) 649 619 316 314 378 302 317
Hillside Aluminium (100%)
Aluminium production (kt) 358 360 178 175 179 180 180
Aluminium sales (kt) 344 360 182 184 183 178 182
Mozal Aluminium (47.1% share)
Aluminium production (kt) 137 135 68 67 67 68 67
Aluminium sales (kt) 147 129 82 51 76 59 70
South Africa Energy Coal (100%)
Energy coal production (kt) 13,423 12,171 6,734 6,741 7,107 6,170 6,001
Domestic sales (kt) 7,334 7,749 3,546 3,835 4,227 4,103 3,646
Export sales (kt) 5,865 4,206 3,117 3,472 3,181 1,923 2,283
Illawarra Metallurgical Coal (100%)
Total coal production (kt) 1,860 3,840 1,041 1,149 1,235 1,905 1,935
Total coal sales (kt) 1,660 3,259 882 1,091 1,365 1,504 1,755
Metallurgical coal production (kt) 1,282 3,082 788 794 1,089 1,515 1,567
Metallurgical coal sales (kt) 1,057 2,527 654 760 1,120 1,178 1,349
Energy coal production (kt) 578 758 253 355 146 390 368
Energy coal sales (kt) 603 732 228 331 245 326 406
Australia Manganese (60% share)
Manganese ore production (kwmt) 1,701 1,811 893 830 865 932 879
Manganese ore sales (kwmt) 1,612 1,740 822 803 875 884 856
Ore grade sold (%, Mn) 46.0 46.0 46.0 45.0 45.7 46.1 45.8
Manganese alloy production (kt) 82 76 43 41 42 41 35
Manganese alloy sales (kt) 78 76 42 37 55 29 47
South Africa Manganese (60% share)
Manganese ore production (kwmt) 1,129 1,075 633 539 477 515 560
Manganese ore sales (kwmt) 1,067 1,010 539 476 539 487 523
Ore grade sold (%, Mn) 40.3 40.3 39.9 40.1 39.1 40.0 40.5
Manganese alloy production (kt) 36 33 19 21 22 11 22
Manganese alloy sales (kt) 28 35 14 21 18 16 19
9
South32’s share 1H18 1H19 2Q18 3Q18 4Q18 1Q19 2Q19
Cerro Matoso (99.9% share)
Ore mined (kwmt) 2,087 1,209 1,036 831 823 613 596
Ore processed (kdmt) 1,340 1,401 644 672 710 712 689
Ore grade processed (%, Ni) 1.83 1.68 1.75 1.76 1.73 1.68 1.69
Payable nickel production (kt) 21.8 21.1 10.1 10.7 11.3 10.7 10.4
Payable nickel sales (kt) 21.3 21.3 9.9 10.8 11.2 10.9 10.4
Cannington (100%)
Ore mined (kwmt) 1,209 1,306 562 571 683 623 683
Ore processed (kdmt) 1,168 1,244 575 544 643 638 606
Silver ore grade processed (g/t, Ag) 165 183 155 207 237 184 181
Lead ore grade processed (%, Pb) 5.1 4.8 4.9 5.2 5.8 4.9 4.7
Zinc ore grade processed (%, Zn) 2.6 2.9 2.3 2.5 2.8 2.9 3.0
Payable Zinc equivalent production(kt) 85.4 95.2 40.0 42.9 58.9 49.7 45.5
Payable silver production (koz) 5,175 6,067 2,412 3,082 4,234 3,185 2,882
Payable silver sales (koz) 5,429 6,340 2,503 3,014 3,542 3,057 3,283
Payable lead production (kt) 49.4 48.3 23.6 23.6 31.4 25.8 22.5
Payable lead sales (kt) 48.6 47.1 22.7 23.5 25.8 22.5 24.6
Payable zinc production (kt) 20.2 26.3 9.2 8.6 12.5 13.2 13.1
Payable zinc sales (kt) 25.7 24.7 12.1 6.3 13.0 8.8 15.9
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 James Clothier Jenny White
T +61 8 9324 9029 T +61 8 9324 9697 T +44 20 7798 1773
M +61 403 328 408 M +61 413 391 031 M +44 7900 046 758
E Alex.Volante@south32.net E James.Clothier@south32.net E Jenny.White@south32.net
17 January 2019
JSE Sponsor: UBS South Africa (Pty) Ltd
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