Wrap Text
Quarterly Report December 2019
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
Quarterly Report December 2019
- Increased alumina production by 4%, achieving record “We continued our strong start to the
year to date production at Brazil Alumina and maintaining year, delivering record year to date
higher rates of calciner availability at Worsley Alumina as production at Brazil Alumina and maintaining
we deliver initiatives to sustainably increase to nameplate production guidance across the majority of
capacity. our operations.
- Maintained saleable aluminium production despite the “We have acted decisively during the
impact of load-shedding at Hillside Aluminium and quarter in response to market
Mozal Aluminium. conditions, reducing contractor
activity at South Africa Energy Coal
- Reacted to lower manganese prices in the December 2019 and higher cost trucking at our South
quarter, reducing our use of higher cost trucking and Africa Manganese business.
completing an extended maintenance shut at our
underground operations at South Africa Manganese. “Our disciplined approach to capital
allocation has enabled us to maintain
- Reduced activity at South Africa Energy Coal in response our strong financial position and
to market conditions, resulting in a revision of FY20 return a further US$331 million in the
production guidance to the bottom end of our range. December 2019 half year with the
continuation of our on-market share
- Completed a longwall move at Illawarra Metallurgical buy-back and payment of our ordinary
Coal’s Appin mine during the December 2019 quarter, dividend in respect of the prior six
where the focus remains on lifting development rates to months.
support improved longwall performance and the
operation’s sustainable return to a three longwall “We have taken further action to
configuration. reshape and improve our portfolio. We
exercised our option to acquire a 50%
- Entered into a binding conditional agreement with interest in the base metals focussed
Seriti Resources for the sale of our shareholding in Upper Kobuk Mineral Projects in
South Africa Energy Coal, with the transaction expected to Alaska, entered into a binding
close in the December 2020 half year, subject to a number conditional agreement for the sale of
of material conditions being satisfied. South Africa Energy Coal and
progressed the review of our
- Exercised our option with Trilogy Metals to acquire a 50% manganese alloy smelting exposure.”
interest in the Upper Kobuk Mineral Projects embedding
another base metals development option into our Graham Kerr, South32 CEO
portfolio.
- Completed the sale of a legacy shareholding owned by our
manganese joint venture for US$93M (South32 share),
distributing the majority of the proceeds to the Group in
the December 2019 quarter.
Production summary
South32 share 1H19 1H20 HoH 2Q19 1Q20 2Q20 QoQ
Alumina production (kt) 2,542 2,635 4% 1,383 1,308 1,327 1%
Aluminium production (kt) 495 496 0% 247 248 248 0%
Energy coal production (kt) 12,929 12,621 (2%) 6,369 6,723 5,898 (12%)
Metallurgical coal production (kt) 3,082 2,859 (7%) 1,567 1,651 1,208 (27%)
Manganese ore production (kwmt) 2,886 2,813 (3%) 1,439 1,415 1,398 (1%)
Manganese alloy production (kt) 109 91 (17%) 57 44 47 7%
Payable nickel production (kt) 21.1 20.6 (2%) 10.4 10.6 10.0 (6%)
Payable silver production (koz) 6,067 6,164 2% 2,882 2,972 3,192 7%
Payable lead production (kt) 48.3 55.3 14% 22.5 26.5 28.8 9%
Payable zinc production (kt) 26.3 32.5 24% 13.1 18.4 14.1 (23%)
1
Unless otherwise noted: percentage variance relates to performance during the half year ended December 2019 compared with the half
year ended December 2018 (HoH) or the December 2019 quarter compared with the September 2019 quarter (QoQ); production and sales
volumes are reported on an attributable basis.
Corporate Update
- In November 2019 we entered into a binding conditional agreement for the sale of our shareholding in South
Africa Energy Coal to Seriti Resources Holdings Proprietary Limited (Seriti Resources) and two trusts which will
acquire and hold equity on behalf of employees and communities. As previously reported, subject to a number of material
conditions(note 1) being satisfied, the transaction is expected to close in the December 2020 half year.
- We exercised our option to acquire a 50% interest in a joint venture (JV) with Trilogy Metals Inc. (TSX: TMQ,
Trilogy) that will own the Upper Kobuk Mineral Projects (UKMP) located in northwest Alaska. On formation of the
JV, expected in the March 2020 quarter, Trilogy will contribute all of its assets associated with the UKMP and
South32 will contribute US$145M to the JV.The JV will retain US$87.5M of the subscription payment to fund its activities and
exploration programs with the balance of US$57.5M loaned back to South32.
- Our manganese equity accounted investments (EAI) sold a legacy shareholding in an unlisted entity for US$93M
(South32 share) during the quarter. With the majority of these funds returned immediately to the Group, we
received net distributions(note 2) of US$160M (South32 share) from our manganese EAI during the December
2019 half year.
- We progressed the review of options for our manganese alloy smelters including their potential divestment,
closure or suspension.
- Consistent with our disciplined approach to capital management we paid our US$139M final dividend in respect of
FY19 in October 2019 and purchased a further 106M shares for a cash consideration of US$192M during the
December 2019 half year. To 31 December 2019 we had completed US$1.18B of our approved US$1.25B capital
management program, including the purchase of 424M shares at an average price of A$3.03 per share
(US$939M) and US$239M returned in the form of special dividends.
- Our geographical earnings mix and the impact of permanent differences that are magnified when margins are
compressed or losses are incurred in specific jurisdictions, continues to have a significant bearing on our ETR.
Until it is sold, South Africa Energy Coal is expected to have an ETR of 0% with all tax assets de-recognised as at 30 June
2019 and no benefit to be recorded for losses made prior to sale. Accordingly, in the December 2019 half year our
Group ETR is expected to be in a range between 75% and 85% (excluding EAI) and is expected to remain elevated should South
Africa Energy Coal continue to be loss-making until its divestment.
2
Production guidance
FY19 1H20 FY20e Comments
(South32 share)
Worsley Alumina
Alumina production (kt) 3,795 1,933 3,965
Brazil Alumina
Alumina production (kt) 1,255 702 1,330
Hillside Aluminium(note 3)
Aluminium production (kt) 715 362 720
Mozal Aluminium(note 3)
Aluminium production (kt) 267 134 273
South Africa Energy Coal(note 4)
Energy coal production (kt) 24,979 11,785 (down)26,000 Guidance revised to
Domestic coal production (kt) 14,978 6,763 (down)15,300 lower end of range as
we adjust volumes to
maximize margins in
Export coal production (kt) 10,001 5,022 (down)10,700 response to market
conditions
Illawarra Metallurgical Coal
Total coal production (kt) 6,647 3,695 7,000
Metallurgical coal production (kt) 5,350 2,859 5,800
Energy coal production (kt) 1,297 836 1,200
Australia Manganese
Manganese ore production (kwmt) 3,349 1,775 3,560 Subject to market
demand
South Africa Manganese
Manganese ore production(note 5) (kwmt) 2,187 1,038 2,100 Subject to market
demand
Cerro Matoso
Payable nickel production (kt) 41.1 20.6 35.6
Cannington
Payable zinc equivalent production(note 6) (kt) 218.2 120.1 221.0
Payable silver production (koz) 12,201 6,164 11,200
Payable lead production (kt) 101.4 55.3 104.0
Payable zinc production (kt) 51.6 32.5 59.0
The denotation (e) refers to an estimate or forecast year.
3
Marketing Update
1H20 1H20
Realised prices(note 7) 1H19 2H19 1H20 vs vs
1H19 2H19
Worsley Alumina
Alumina (US$/t) 458 383 322 (30%) (16%)
Brazil Alumina
Alumina (US$/t) 504 409 301 (40%) (26%)
Hillside Aluminium
Aluminium (US$/t) 2,144 1,922 1,859 (13%) (3%)
Mozal Aluminium
Aluminium (US$/t) 2,171 1,986 1,914 (12%) (4%)
South Africa Energy Coal
Domestic coal (US$/t) 22 26 23 5% (12%)
Export coal (US$/t) 83 59 55 (34%) (7%)
Illawarra Metallurgical Coal
Metallurgical coal (US$/t) 207 210 154 (26%) (27%)
Energy coal (US$/t) 68 62 53 (22%) (15%)
Australia Manganese(note 8)
Manganese ore (US$/dmtu, FOB) 6.59 6.11 4.49 (32%) (27%)
South Africa Manganese(note 9)
Manganese ore (US$/dmtu, FOB) 5.85 5.29 3.81 (35%) (28%)
Cerro Matoso(note 10)
Payable nickel (US$/lb) 5.20 5.58 6.77 30% 21%
Cannington (note 11)
Payable silver (US$/oz) 14.7 14.2 17.5 19% 23%
Payable lead (US$/t) 1,656 1,838 1,869 13% 2%
Payable zinc (US$/t) 2,146 2,096 1,591 (26%) (24%)
- Realised prices exclude third party products and services. We currently anticipate an underlying EBIT loss for
third party products and services(note 12) of approximately US$12M in the December 2019 half year (H1 FY19:
US$28M). This predominantly reflects the procurement of lower cost third party volumes to replace higher cost
equity production in order to fulfil contractual commitments at South Africa Energy Coal.
Development and Exploration Update
- We completed the voluntary remediation program for historical tailings at Hermosa, establishing the initial tailings
storage facility that is able to support the commencement of future production when production permits are
received. Our pre-feasibility study remains on-track for completion in the June 2020 half year.
- We advanced feasibility study work at the Eagle Downs Metallurgical Coal project ahead of a final investment
decision scheduled for the December 2020 half year.
- Consistent with our strategy to partner with companies to fund early stage greenfield exploration opportunities, we
invested US$10M during the December 2019 half year. We directed a further US$26M towards exploration
programs at our existing operations (US$19M capitalised), including US$2M for our EAI (US$1M capitalised) and
US$12M at Hermosa (all capitalised) to further increase our knowledge of the Taylor Deposit and the greater
Hermosa land package.
4
Worsley Alumina
(86% share)
2Q20 2Q20
South32 share 1H19 1H20 HoH 2Q19 1Q20 2Q20 vs vs
2Q19 1Q20
Alumina production (kt) 1,906 1,933 1% 1,052 952 981 (7%) 3%
Alumina sales (kt) 1,885 1,891 0% 1,035 918 973 (6%) 6%
Worsley Alumina saleable production increased by 1% (or 27kt) to 1,933kt in the December 2019 half year, despite an
extended calciner shut, as the refinery continued to benefit from improved calciner availability and we opportunistically
sold stockpiled hydrate. FY20 production guidance remains unchanged at 3,965kt with further calciner maintenance
scheduled for the March 2020 quarter.
We realised a premium to the Platts Alumina Index(note 13) on a volume weighted M-1 basis for alumina sales in the
December 2019 half year. This mostly reflected the structure of specific legacy supply contracts with our Mozal
Aluminium smelter that are linked to the Platts Alumina Index on an M-1 basis, with caps and floors embedded within
specific contracts that reset every calendar year. All other alumina sales were at market based prices.
Brazil Alumina
(36% share)
2Q20 2Q20
South32 share 1H19 1H20 HoH 2Q19 1Q20 2Q20 vs vs
2Q19 1Q20
Alumina production (kt) 636 702 10% 331 356 346 5% (3%)
Alumina sales (kt) 619 678 10% 317 304 374 18% 23%
Brazil Alumina saleable production increased by 10% (or 66kt) to a record 702kt in the December 2019 half year as
the refinery benefitted from improved steam generation following the installation of package boilers in the June 2019
quarter, enabling the benefits of the De-bottlenecking Phase One project to be realised. Notwithstanding the strong
operating performance, lower alumina prices and an increase in the use of higher cost third party bauxite is expected to
impact the profitability of the operation in the December 2019 half year. FY20 production guidance remains unchanged at
1,330kt with maintenance scheduled for the June 2020 quarter.
Hillside Aluminium
(100%)
2Q20 2Q20
South32 share 1H19 1H20 HoH 2Q19 1Q20 2Q20 vs vs
2Q19 1Q20
Aluminium production (kt) 360 362 1% 180 181 181 1% 0%
Aluminium sales (kt) 360 350 (3%) 182 174 176 (3%) 1%
Hillside Aluminium saleable production increased by 1% (or 2kt) to 362kt in the December 2019 half year as the
smelter continued to test its maximum technical capacity, despite the impact to production from load-shedding and the
completion of a major workforce restructure in the June 2019 quarter. Sales decreased by 3% in the December 2019
half year as a shipment slipped into January 2020. FY20 production guidance(note 3) remains unchanged at 720kt.
5
Mozal Aluminium
(47.1% share)
2Q20 2Q20
South32 share 1H19 1H20 HoH 2Q19 1Q20 2Q20 vs vs
2Q19 1Q20
Aluminium production (kt) 135 134 (1%) 67 67 67 0% 0%
Aluminium sales (kt) 129 136 5% 70 64 72 3% 13%
Mozal Aluminium saleable production decreased by 1% (or 1kt) to 134kt in the December 2019 half year as the
smelter’s operating performance continued to be impacted by load-shedding events. Despite an increase in the
frequency of disruptions, FY20 production guidance(note 3) remains unchanged at 273kt.
The smelter sources all of its alumina from our Worsley Alumina refinery with approximately 50% priced as a
percentage of the LME aluminium index under a legacy contract and the remainder linked to the Platts alumina index on an
M-1 basis,with caps and floors embedded within specific contracts that reset every calendar year. As a result the smelter’s
cost of alumina was a significant premium to the index in the December 2019 half year.
South Africa Energy Coal
(100%)
2Q20 2Q20
South32 share 1H19 1H20 HoH 2Q19 1Q20 2Q20 vs vs
2Q19 1Q20
Energy coal production (kt) 12,171 11,785 (3%) 6,001 6,292 5,493 (8%) (13%)
Domestic sales (kt) 7,749 6,688 (14%) 3,646 3,726 2,962 (19%) (21%)
Export sales (kt) 4,206 4,854 15% 2,283 1,977 2,877 26% 46%
South Africa Energy Coal saleable production decreased by 3% (or 386kt) to 11.8Mt in the December 2019 half year
as the operation demobilised contractors in response to market conditions, more than offsetting a 15% increase in
export sales volumes following improved dragline availability at Klipspruit.
Notwithstanding the improvement in dragline performance, supporting a 46% increase in export sales during the
December 2019 quarter, its ramp-up to full utilisation has been slower than anticipated as a result of wet weather.
Combined with our near-term outlook for domestic demand and the demobilisation of contractors operating in
unprofitable pits, we now expect FY20 production to be at the bottom end of our guidance range (26.0Mt). Operating
unit costs are expected to be approximately 10% above the top end of our guidance range of US$40/t in the
December 2019 half year, ahead of benefitting from an expected increase in volumes during the June 2020 half year
and the realisation of cost saving initiatives which include contractor demobilisation.
Illawarra Metallurgical Coal
(100%)
2Q20 2Q20
South32 share 1H19 1H20 HoH 2Q19 1Q20 2Q20 vs vs
2Q19 1Q20
Total coal production (kt) 3,840 3,695 (4%) 1,935 2,082 1,613 (17%) (23%)
Total coal sales(note 14) (kt) 3,259 3,619 11% 1,755 1,848 1,771 1% (4%)
Metallurgical coal production (kt) 3,082 2,859 (7%) 1,567 1,651 1,208 (23%) (27%)
Metallurgical coal sales (kt) 2,527 2,800 11% 1,349 1,482 1,318 (2%) (11%)
Energy coal production (kt) 758 836 10% 368 431 405 10% (6%)
Energy coal sales (kt) 732 819 12% 406 366 453 12% 24%
6
Illawarra Metallurgical Coal saleable production decreased by 4% (or 145kt) to 3.7Mt in the December 2019 half year
following the completion of a longwall move at the Appin mine during the December 2019 quarter. FY20 production
guidance remains unchanged at 7.0Mt with both the Dendrobium and Appin longwalls continuing to perform strongly
and a further longwall move scheduled for the March 2020 quarter. Achieving improved development rates at Appin to
support the improved longwall performance and a sustained return to a three longwall configuration at the operation
from the June 2020 quarter remains a focus.
Australia Manganese
(60% share)
2Q20 2Q20
South32 share 1H19 1H20 HoH 2Q19 1Q20 2Q20 vs vs
2Q19 1Q20
Manganese ore production (kwmt) 1,811 1,775 (2%) 879 868 907 3% 4%
Manganese ore sales (kwmt) 1,740 1,737 (0%) 856 852 885 3% 4%
Manganese alloy production (kt) 76 57 (25%) 35 28 29 (17%) 4%
Manganese alloy sales (kt) 76 58 (24%) 47 32 26 (45%) (19%)
Australia Manganese saleable ore production decreased by 2% (or 36kwmt) to 1,775kwmt in the December 2019 half
year as heavy rainfall in late FY19 slowed throughput for the primary circuit at the start of the September 2019 quarter.
Separately, with demand for our low cost Premium Concentrate Ore (PC02) product remaining favourable, we
continued to operate the circuit above its design capacity, contributing 11% of total production (H1 FY19: 9%). The
PC02 fines product has a manganese content of approximately 40%, which leads to both grade and product-type
discounts when referenced to the high grade 44% manganese lump ore index.
The Metal Bulletin 44% lump ore index (CIF Tianjin, China) price was US$4.30/dmtu as at 10 January 2020 after averaging
US$3.95/dmtu during the month of December 2019. While we continue to monitor market conditions and the potential impact from
the wet season across the remainder of the financial year, FY20 production guidance remains unchanged at 3,560kwmt.
Manganese alloy saleable production decreased by 25% (or 19kt) to 57kt in the December 2019 half year as one of the four
furnaces was taken offline.
South Africa Manganese
(60% share)
2Q20 2Q20
South32 share 1H19 1H20 HoH 2Q19 1Q20 2Q20 vs vs
2Q19 1Q20
Manganese ore production(note 5) (kwmt) 1,075 1,038 (3%) 560 547 491 (12%) (10%)
Manganese ore sales(note 5) (kwmt) 1,010 1,073 6% 523 544 529 1% (3%)
Manganese alloy production (kt) 33 34 3% 22 16 18 (18%) 13%
Manganese alloy sales (kt) 35 28 (20%) 19 13 15 (21%) 15%
South Africa Manganese saleable ore production decreased by 3% (or 37kwmt) to 1,038kwmt in the December 2019
half year as we reduced our use of higher cost trucking and undertook an extended maintenance shut at our Wessels
mine in the December 2019 quarter, in response to market conditions. The Metal Bulletin 37% lump ore index (FOB Port
Elizabeth, South Africa) price was US$3.46/dmtu as at 10 January 2020 after averaging US$3.09/dmtu during the month of December
2019. FY20 production guidance remains unchanged at 2,100kwmt, as we continue to monitor market conditions and respond
accordingly.
Manganese alloy saleable production increased by 3% (or 1kt) to 34kt in the December 2019 half year.
7
Cerro Matoso
(99.9% share)
2Q20 2Q20
South32 share 1H19 1H20 HoH 2Q19 1Q20 2Q20 vs vs
2Q19 1Q20
Payable nickel production (kt) 21.1 20.6 (2%) 10.4 10.6 10.0 (4%) (6%)
Payable nickel sales (kt) 21.3 20.4 (4%) 10.4 10.0 10.4 0% 4%
Cerro Matoso payable nickel production decreased by 2% (or 0.5kt) to 20.6kt in the December 2019 half year following
a planned increase in the contribution of lower grade stockpiled ore feed. FY20 production guidance remains
unchanged at 35.6kt with the operation scheduled to undertake a major furnace refurbishment in the June 2020
quarter.
Cannington
(100% share)
2Q20 2Q20
South32 share 1H19 1H20 HoH 2Q19 1Q20 2Q20 vs vs
2Q19 1Q20
Payable zinc equivalent production(note 6) (kt) 107.4 120.1 12% 51.3 60.5 59.6 16% (1%)
Payable silver production (koz) 6,067 6,164 2% 2,882 2,972 3,192 11% 7%
Payable silver sales (koz) 6,340 5,912 (7%) 3,283 2,363 3,549 8% 50%
Payable lead production (kt) 48.3 55.3 14% 22.5 26.5 28.8 28% 9%
Payable lead sales (kt) 47.1 51.8 10% 24.6 20.6 31.2 27% 51%
Payable zinc production (kt) 26.3 32.5 24% 13.1 18.4 14.1 8% (23%)
Payable zinc sales (kt) 24.7 35.3 43% 15.9 18.9 16.4 3% (13%)
Cannington payable zinc equivalent production increased by 12% (or 12.7kt) to 120.1kt in the December 2019 half
year as the operation drew down run of mine stocks to a normalised level and recorded a higher average zinc grade in
the September 2019 quarter, that more than offset lower silver grades across the half year.
Processed silver, lead and zinc grades met our expectations in the December 2019 half year and FY20 production
guidance remains unchanged (silver 11,200koz, lead 104.0kt and zinc 59.0kt) with sequentially lower lead and silver
grades expected in the June 2020 half year. Higher payable zinc sales in the December 2019 half year reflect timing
differences following significant floods in North Queensland in the March 2019 quarter that caused an extended outage of
a third-party rail line connecting Cannington to the Townsville port.
8
Notes:
1. Refer to the market announcement “Agreement to Divest South Africa Energy Coal” dated 6 November 2019.
2. 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.
3. Production guidance for our Hillside Aluminium and Mozal Aluminium smelters does not assume any load-shedding impacts
on production.
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 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.
6. Payable zinc equivalent (kt) was calculated by aggregating Revenue from payable silver, lead and zinc, and dividing
the total Revenue by the price of zinc. FY19 realised prices for zinc (US$2,122/t), lead (US$1,754/t) and silver
(US$14.4/oz) have been used for FY19, H1 FY20 and FY20e.
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. Realised prices for Cannington are unaudited and net of treatment and refining charges.
12. Underlying EBIT on third party products and services is unaudited and should not be considered as an indication of
or alternative to an IFRS measure of profitability, financial performance or liquidity.
13. The average of the Platts Alumina Index (FOB Australia) on the basis of a one month lag to published pricing (Month
minus one or “M-1”)was US$299/t in the December 2019 half year.
14. Illawarra Metallurgical Coal sales are adjusted for moisture and will not reconcile directly to Illawarra
Metallurgical Coal production.
The following abbreviations have been used throughout this report: US$ 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); thousand dry metric tonnes (kdmt).
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.
9
Operating Performance
South32 share 1H19 1H20 2Q19 3Q19 4Q19 1Q20 2Q20
Worsley Alumina (86% share)
Alumina hydrate production (kt) 1,947 1,910 988 921 934 967 943
Alumina production (kt) 1,906 1,933 1,052 893 996 952 981
Alumina sales (kt) 1,885 1,891 1,035 936 1,036 918 973
Brazil Alumina (36% share)
Alumina production (kt) 636 702 331 308 311 356 346
Alumina sales (kt) 619 678 317 247 374 304 374
Hillside Aluminium (100%)
Aluminium production (kt) 360 362 180 176 179 181 181
Aluminium sales (kt) 360 350 182 156 191 174 176
Mozal Aluminium (47.1% share)
Aluminium production (kt) 135 134 67 66 66 67 67
Aluminium sales (kt) 129 136 70 69 70 64 72
South Africa Energy Coal (100%)
Energy coal production (kt) 12,171 11,785 6,001 6,098 6,710 6,292 5,493
Domestic sales (kt) 7,749 6,688 3,646 3,950 3,336 3,726 2,962
Export sales (kt) 4,206 4,854 2,283 2,547 3,122 1,977 2,877
Illawarra Metallurgical Coal (100%)
Total coal production (kt) 3,840 3,695 1,935 1,202 1,605 2,082 1,613
Total coal sales(note 14) (kt) 3,259 3,619 1,755 1,531 1,516 1,848 1,771
Metallurgical coal production (kt) 3,082 2,859 1,567 990 1,278 1,651 1,208
Metallurgical coal sales (kt) 2,527 2,800 1,349 1,256 1,261 1,482 1,318
Energy coal production (kt) 758 836 368 212 327 431 405
Energy coal sales (kt) 732 819 406 275 255 366 453
Australia Manganese (60% share)
Manganese ore production (kwmt) 1,811 1,775 879 820 718 868 907
Manganese ore sales (kwmt) 1,740 1,737 856 782 916 852 885
Ore grade sold (%, Mn) 46.0 45.0 45.8 45.8 46.0 45.6 44.4
Manganese alloy production (kt) 76 57 35 38 40 28 29
Manganese alloy sales (kt) 76 58 47 29 46 32 26
South Africa Manganese (60% share)
Manganese ore production(note 5) (kwmt) 1,075 1,038 560 540 572 547 491
Manganese ore sales(note 5) (kwmt) 1,010 1,073 523 530 573 544 529
Ore grade sold (%, Mn) 40.3 40.0 40.5 39.7 41.7 40.4 39.6
Manganese alloy production (kt) 33 34 22 14 22 16 18
10
South32 share 1H19 1H20 2Q19 3Q19 4Q19 1Q20 2Q20
Manganese alloy sales (kt) 35 28 19 16 22 13 15
Cerro Matoso (99.9% share)
Ore mined (kwmt) 1,209 1,400 596 645 424 668 732
Ore processed (kdmt) 1,401 1,389 689 634 703 712 677
Ore grade processed (%, Ni) 1.68 1.66 1.69 1.63 1.65 1.65 1.67
Payable nickel production (kt) 21.1 20.6 10.4 9.4 10.6 10.6 10.0
Payable nickel sales (kt) 21.3 20.4 10.4 9.1 10.8 10.0 10.4
Cannington (100%)
Ore mined (kwmt) 1,306 1,360 683 648 771 694 666
Ore processed (kdmt) 1,244 1,394 606 547 704 656 738
Silver ore grade processed (g/t, Ag) 183 165 181 202 172 168 162
Lead ore grade processed (%, Pb) 4.8 4.8 4.7 5.6 4.8 4.9 4.8
Zinc ore grade processed (%, Zn) 2.9 3.3 3.0 3.0 3.0 3.8 2.8
Payable Zinc equivalent production(note 6) (kt) 107.4 120.1 51.3 50.7 60.1 60.5 59.6
Payable silver production (koz) 6,067 6,164 2,882 2,881 3,253 2,972 3,192
Payable silver sales (koz) 6,340 5,912 3,283 1,820 4,874 2,363 3,549
Payable lead production (kt) 48.3 55.3 22.5 24.8 28.3 26.5 28.8
Payable lead sales (kt) 47.1 51.8 24.6 12.7 41.7 20.6 31.2
Payable zinc production (kt) 26.3 32.5 13.1 10.7 14.6 18.4 14.1
Payable zinc sales (kt) 24.7 35.3 15.9 7.2 15.7 18.9 16.4
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 Rebecca Keenan Jenny White
T +61 8 9324 9029 T +61 8 9324 9364 T +44 20 7798 1773
M +61 403 328 408 M +61 402 087 055 M +44 7900 046 758
E Alex.Volante@south32.net E Rebecca.Keenan@south32.net E Jenny.White@south32.net
16 January 2020
JSE Sponsor: UBS South Africa (Pty) Ltd™
11
Date: 16-01-2020 09:45:00
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