South32 announced on Monday that manganese ore production from its Northern Cape mines reached a record 2.18 million tons for the group’s 2024 financial year, ending in June.
Despite this achievement, the company faced challenges, reporting asset write-downs totaling $818 million in its fourth-quarter and half-year production update.
As a result, South32’s shares plummeted by as much as 12.9% in intraday trading on the Australian Securities Exchange.
The company, which will report its full-year results on August 29, recorded a pre-tax write-down of $554 million on its Worsley alumina asset and a $264 million reduction in the value of its Cerro Matoso nickel project in Colombia.
Although South32 received environmental approval to extend operations at Worsley for another 15 years, the Western Australian government imposed conditions that the company described as creating “significant operating challenges” potentially affecting the refinery’s future.
These conditions followed environmentalists’ concerns about mining impacts on Western Australia’s Jarrah forests and wildlife. South32 is currently appealing these restrictions, according to Bloomberg News.
On the Johannesburg Stock Exchange, South32 shares closed 12.4% lower.
In its production update, South32 highlighted improved performance at its South African manganese operations, which exceeded guidance by 9%.
The price of manganese ex-South Africa surged 34% in the second half of the financial year to $4.05 per dry metric ton (FOB).
However, the annual price of $3.53/dmt was 1% lower. Manganese sales increased by 2% year-on-year.
South32 operates the mines in partnership with Anglo American, which is restructuring to focus on its copper and iron ore potential.
Anglo American is selling its platinum, diamonds, metallurgical coal, and possibly its South African manganese assets.
However, South32 CEO Graham Kerr stated in June that his company would not pay a premium for Anglo’s 40% stake in the manganese mines. “We’re not going to pay a control premium for something we already run,” Kerr told News24.
Additionally, South32 achieved record production at its Hillside aluminium smelter, which operated at maximum technical capacity despite load-shedding impacts. The company expects 2025 production to match 2024’s output of 720,000 tons.
