South32 said it had exceeded production in the fourth quarter to June 30. On July 1, the group announced the sale of its aluminium value chain business to Alcoa, a deal that included Hillside Aluminium in Richards Bay, but excluded Mozal in Mozambique, which is on care and maintenance.
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Global resources group South32 exceeded production guidance, generated strong operating results and accelerated its portfolio transition to base metals in the three months to June 30.
The share price of the Australia-based group increased 4.47% to R47,41 on the JSE Monday morning after the release of a quarterly report, indicating investors generally viewed the fourth quarter production favourably. The share was also a robust 35% higher than a year before.
"We increased quarterly sales volumes by 15%, capturing the benefit of strong market conditions across many of our commodities, and releasing working capital which added to the group's cash generation,” said the CEO Matt Daley in a statement on Monday. Daley became CEO on July 1 this year.
During the quarter, Hillside Aluminium's saleable production was largely unchanged at 717kt in the 2026 financial year, as the smelter in Richards Bay, South Africa continued to test its maximum technical capacity despite the impact of load shedding. Production guidance for the 2027 year was unchanged at 720,000 tons. Its sales increased 10% in the fourth quarter due to a carry-over shipment from the prior quarter.
Daley said the Middle East crisis had resulted in higher raw material input prices and freight rates for the group. Despite these impacts and stronger producer currencies, operating unit costs had been well controlled through the 2026 financial year, supported by stable production results and a continued focus on cost efficiencies.
The group did a step change on July 1, when it announced the sale of its aluminium value chain business to US-based peer Alcoa, in a transaction that includes Hillside Aluminium, but excludes the Mozal Smelter in Mozambique, which is on care and maintenance. The deal had an implied enterprise value of up to $5.6 billion (R92.46bn), plus $1.2bn of related rehabilitation provisions.
Once complete, this sale is planned to unlock significant value for shareholders and reposition South32 as a leading upstream base metals-focused company, said Daley.
"Our portfolio will be built around high-margin, long-life assets in favourable jurisdictions, with about 85% of pro forma earnings from base and precious metals and some 55% production growth from approved projects," said Daley.
Some significant milestones were reached in the group’s copper and zinc development projects. At Sierra Gorda, the grinding line project was approved for execution, which is expected to increase the group’s share of copper equivalent production by some 30%.
At Hermosa, construction on the Taylor zinc-lead-silver project continued, and a Final Record of Decision was received on July 7, completing the federal permitting process under the National Environmental Policy Act.
"Looking ahead, our focus on operational excellence, a strong balance sheet and transformational growth in base metals leaves us well positioned to deliver value for shareholders," said Daley.
Aluminium production exceeded the 2026 financial guidance by 1%, while alumina production was in line with guidance.
Sierra Gorda exceeded 2026 production guidance by 2% and delivered record annual distributions of $401m (South32 share).
Cannington Mine in Australia, one of the world’s largest producers of silver, lead and zinc, had a strong finish, delivering a 29% increase in quarterly production and exceeding 2026 guidance by 2%. Some $710m was invested at Hermosa as construction of the Taylor zinc-lead-silver project advanced.
Ambler Metals commenced summer field season drilling and advanced development studies for the high-grade Arctic deposit.
Manganese production exceeded 2026 guidance by 2%, with South Africa Manganese increasing quarterly production by 6%.
Australia Manganese continued to progress approvals, infrastructure investment and mine planning to manage elevated water volumes.
Revised production guidance for the 2027 financial year would be provided at the release of the full year annual financial results.
First production from Taylor was expected in the second half of the 2028 financial yea. Based on updated assumptions, Taylor was expected to deliver steady-state EBITDA (earnings before interest, tax, depreciation, and amortisation) of about $650m per year and a net present value of $3.1bn.
On June 30, the Sierra Gorda joint venture approved execution of the fourth grinding line project. The plant expansion project is expected to increase processing capacity by about 25% to 60 million tons per year.
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