South32 shelves Eagle Downs; reports strong quarterly production
Mining News Pro - Diversified miner South32 has set a number of production records in the first half of 2021, following a solid December quarter.

“This was another period of strong operating performance across our business, with three of our operations setting production records for the half year,” said CEO Graham Kerr on Thursday.

“I’m pleased that the efforts of our people during this challenging period have enabled us to achieve a strong result and increase our full year production guidance for the Cannington and Cerro Matoso.”

Record production for the year to date was achieved at the Worsley Alumina operation, with above nameplate capacity achieved on the back of ongoing improvement initiatives, as well as at the Brazil Alumina project, as the refinery continued to achieve high levels of plant availability despite planned maintenance.

Year-to-date production records were also set for the Australia Manganese operations, as performance of the high-grade circuit improved.

South32 on Thursday reported that alumina production for the half-year was up 3% on the previous corresponding period, to 2.7-million tonnes, while aluminium production remained stable at 496 000 t.

Energy coal production for the half-year was down 4%, to just over 12-million tonnes, while metallurgical coal production was up by 14%, to 3.2-million tonnes. Manganese ore production increased by 4%, to 2.9-million tonnes, however, manganese alloy production was down 44% to 51 000 t as the South African manganese alloy smelter remained on care and maintenance, and production at the Tasmanian Electro Metallurgical Company (Temco) smelter in Tasmania, was scaled down ahead of its divestment.

Nickel production for the six months to December was down 22%, to 16 100 t, as South32 launched a major refurbishment of one of the furnaces in the December quarter. The refurbishment is on track for completion by the end of January, ahead of schedule.

Meanwhile, silver production for the half-year declined by 3%, to 5.9-million ounces, lead production increased by 4%, to 57 600 t, and zinc production was down by 6%, to 30 400 t.

“We’re in a strong financial position, resuming our on-market share buy-back programme in October. Our unchanged capital management framework and disciplined approach to capital allocation is designed to reward shareholders as supportive market conditions translate to financial performance,” said Kerr on Thursday.

“The ongoing transformation of our portfolio continues to gain momentum as we focus on exiting lower returning businesses and work towards increasing our base metals exposure.”

South32 on Thursday announced that following the completion of the Eagle Downs metallurgical coal feasibility study in December last year, the company had taken the decision not to proceed with the project at this time.

“While the study indicated the potential for a long-life operation, the expected returns do not currently support the allocation of capital in accordance with our capital management framework. The project has been placed on hold while the partners assess options that may include the divestment of our 50% interest,” the company told shareholders.

South32 in 2018 acquired its 50% interest in the Queensland-based project, for $133-million, along with a coal-price linked production royalty capped at $80-million.

The project, which was placed on care and maintenance in 2015, is immediately adjacent to BHP Mitsubishi Alliance’s Peak Downs mine, and has an estimated resource of 1.1-billion tonnes.

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