South32 reported a strong start to its 2024 financial year with manganese ore production from its South African mines in the first quarter.
Production from the Northern Cape assets reached 628,000 tons, a 12% increase compared to the same period in South32’s 2023 financial year. Sales for the quarter totaled 528,000 tons, marking a 10% year-on-year increase.
However, quarter-on-quarter sales were 3% lower due to port congestion, which was exacerbated by poor weather conditions and challenges with government-owned ports and rail company, Transnet.
Shipping lines struggled to meet demand as vessels were delayed to and from South Africa, with some experiencing delays of over three weeks on return voyages.
Despite these challenges, South32 maintained its full-year manganese ore production guidance for its South African operations at two million tons.
During the quarter, South32 reported a $250 million capital build, primarily due to a $100 million increase in aluminium inventories.
The company expected to return inventory levels to normal in the current quarter as sales from its Brazilian operations commenced and drawdown continued from its southern African assets.
The higher inventories led to an increase in net debt from $299 million to $782 million.
In August, South32 announced its plans to reduce emissions at its Hillside aluminium facilities to avoid discounted metal sales compared to “green aluminium” produced elsewhere.
The company had also signed an agreement with Eskom to explore the purchase of nuclear energy from the utility’s Koeberg facilities and planned to investigate other low-carbon energy solutions like wind, solar power, and battery storage.
Graham Kerr, CEO of South32, emphasized the company’s commitment to reducing its emissions footprint and exploring sustainable energy sources.
