South32 Stock Rises on Q4 Manganese Surge, Eyes Losses at Australian Mines and Power Woes at Mozal
Shares in South32 climbed nearly 3% on Monday after the company reported stronger-than-expected manganese production in the fourth quarter.
The rebound was driven by the resumption of exports from Australian operations previously disrupted by severe weather, according to Reuters.
The ASX-listed mining company’s Groote Eylandt Mining Co. project in the Northern Territory had faced significant operational setbacks due to extreme weather earlier in 2025, exacerbated by infrastructure damage from Tropical Cyclone Megan in 2024.
“Australia Manganese successfully resumed export shipments during the quarter, marking a significant recovery from the impacts caused by Tropical Cyclone Megan,” South32 noted in its fourth-quarter production update.
In the June quarter, the Perth-based diversified miner produced 1.1 million metric tons of manganese ore—more than double the 534,000 tons recorded a year earlier and well above analyst expectations of 850,000 tons, based on Visible Alpha consensus estimates.
Despite this strong operational recovery, South32 warned that its Australian manganese operations would post operating losses between $100 million and $120 million in fiscal 2025, largely due to the challenges associated with restarting production.
South32’s stock rose as much as 2.8% to A$2.97, outperforming the broader mining index, which slipped 0.3%.
However, the company faces other significant challenges. It flagged potential impairments at its Mozal aluminium smelter in Mozambique, citing concerns over rising power costs.
It is also reviewing the future of its Queensland silver-lead-zinc operation due to increasing operational complexities.
According to analysts at Jefferies, while the latest quarter demonstrated operational strength, several of South32’s marginal assets could face “negative valuation revisions” in the company’s full-year results scheduled for August.
Earlier in July, South32 stated that production guidance for its Mozal smelter for fiscal year 2026 was under review.
The group is currently in negotiations with Mozambique’s hydroelectric power provider, Hidroeléctrica de Cahora Bassa (HCB), to renew a key power supply agreement expiring in March 2026.
Mozal relies on electricity from the Cahora Bassa hydroelectric facility on the Zambezi River, which also supplies power to South Africa’s Eskom. Under its agreement, Eskom provides emergency power during any supply interruptions from HCB.
South32 had aimed to return Mozal to its full production capacity of 370,000 metric tons per year by 2026.
However, ongoing instability—such as violent protests following disputed elections in Mozambique—has forced the company to revise its forecast.
For the 2025 financial year, it now expects output of 360,000 tons, down from earlier projections. In 2023/24, the smelter produced 314,000 tons.
Located roughly 20 kilometers west of Mozambique’s capital, Maputo, Mozal is the country’s largest industrial employer and a cornerstone of its economic activity.
About the Author
