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SOUTH32 LIMITED - Quarterly Report September 2019

Release Date: 17/10/2019 08:30
Code(s): S32     PDF:  
Wrap Text
Quarterly Report September 2019

South32 Limited
(Incorporated in Australia under the Corporations Act 2001 (Cth))
(ACN 093 732 597)
ASX, LSE, JSE Share Code: S32 ADR: SOUHY
ISIN: AU000000S320

Quarterly Report September 2019



-   Net cash increased by US$163M to US$527M(Note 1) following the allocation of a further US$74M to our on-
    market share buy-back, as we benefitted from an unwind in working capital, despite an increase in finished
    goods inventory during the quarter.

-   Maintained FY20 production guidance for all operations.

-   Achieved record production at Brazil Alumina and another strong quarter at Worsley Alumina as we deliver
    initiatives to sustainably increase to nameplate capacity from FY20.

-   Continued to operate our aluminium smelters at their maximum technical capacity despite the impact of load-
    shedding.

-   Increased production at Illawarra Metallurgical Coal by 30% as the longwalls continued to perform strongly
    following the completion of two moves in the prior quarter.

-   Maintained higher rates of manganese ore production at our low-cost, flexible operations and commenced 
    exploration drilling in the Southern Areas target at GEMCO following the receipt of approvals.

-   Progressed exclusive negotiations with Seriti Resources in respect of its indicative offer to acquire our South
    Africa Energy Coal business and remain on track to provide a further update in the December 2019 quarter.

-   Invested US$17M in exploration at our early stage greenfield projects and existing operations, including at
    Hermosa to further increase our knowledge of the Taylor Deposit and greater land package.


“We have maintained annual production guidance for all of our operations with a strong start to the year at our
alumina refineries, a 30 per cent increase in production at Illawarra Metallurgical Coal and a 10 per cent increase
in manganese ore production.

“With macro conditions creating headwinds for our key commodities, we remain focused on driving cost and
operating performance across our portfolio.

“Our disciplined approach to capital allocation has allowed us to return a further US$74 million with the
continuation of our US$1.25 billion capital management program, and following the end of the quarter pay our
US$139 million ordinary dividend in respect of the prior six months.

“We remain on track to finalise Seriti Resources’ offer for our South Africa Energy Coal business in the coming
quarter, a significant milestone in the divestment process and a further step towards reshaping our portfolio.”
Graham Kerr, South32 CEO


Production summary

South32 share                      YTD FY19        YTD FY20         YoY        1Q19           4Q19        1Q20       QoQ

Alumina production (kt)               1,159           1,308          13%      1,159          1,307       1,308        0%

Aluminium production (kt)               248             248           0%        248            245         248        1%

Energy coal production (kt)           6,560           6,723           2%      6,560          7,037       6,723       (4%)

Metallurgical coal production (kt)    1,515            1,651          9%      1,515          1,278       1,651        29%

Manganese ore production (kwmt)       1,447            1,415         (2%)     1,447          1,290       1,415        10%

Manganese alloy production (kt)          52               44        (15%)        52             62          44       (29%)

Payable nickel production (kt)         10.7             10.6         (1%)      10.7           10.6        10.6         0%

Payable silver production (koz)       3,185            2,972         (7%)     3,185          3,253       2,972        (9%)

Payable lead production (kt)           25.8             26.5          3%       25.8           28.3        26.5        (6%)

Payable zinc production (kt)           13.2             18.4          39%      13.2           14.6        18.4         26%
Unless otherwise noted: percentage variance relates to performance during the September 2019 quarter compared with the June 2019 
quarter (QoQ); production and sales volumes are reported on an attributable basis.




                                                                                                                              1
Corporate Update
-    We progressed exclusive negotiations with Seriti Resources Holdings Proprietary Limited (Seriti Resources)
     in respect of its indicative offer to acquire our South Africa Energy Coal business. The offer is subject to final
     negotiation and execution of a binding Sale and Purchase Agreement and we remain on track to provide a
     further update to the market in the December 2019 quarter.
-    We continued to review options for our manganese alloy smelters as changes in market dynamics have
     reduced the attractiveness of our exposure and we will update the market in the March 2020 quarter.
-    Net cash increased by US$163M to US$527M(Note 1) following the allocation of a further US$74M to our
     on-market share buy-back, as we benefitted from an unwind in working capital, despite an increase in
     finished goods inventory during the quarter. We bought back a further 41M shares during the September
     2019 quarter and have now completed US$1.06B of our US$1.25B capital management program, including
     the purchase of 359M shares at an average price of A$3.10 per share. On 10 October 2019 we also paid a
     fully-franked dividend of US$139M in respect of the June 2019 half year.
-    We have settled the insurance claim for the incident that led to an extended outage of the Klipspruit dragline
     at South Africa Energy Coal during FY19, receiving US$98M as full and final payment from our insurers
     during the September 2019 quarter.
-    We received net distributions(Note 2) of US$63M (South32 share) from our manganese equity accounted
     investments (EAI) in the September 2019 quarter following the payment of US$115M (100% share) in
     royalties at Australia Manganese in respect of the prior 6 month period.
-    The primary corporate tax rates applicable to the Group include: Australia 30%, South Africa 28%, Colombia
     33%(Note 3),Mozambique 0%(Note 3) and Brazil 34%. Our geographical earnings mix continues to have a
     significant bearing on our ETR given differing country tax rates, whilst the impact of permanent differences
     is magnified when margins are compressed or losses are incurred in specific jurisdictions. In the 2019
     financial year our ETR was 37.8% (excluding EAI) and the de-recognition of tax assets in South Africa
     Energy Coal will further increase the Group’s ETR, should the operation make a loss in the FY20 financial
     year.

      Production guidance
                                                                FY19          3M YTD FY20               FY20e
      (South32 share)
      Worsley Alumina
      Alumina production (kt)                                  3,795                  952               3,965
      Brazil Alumina
      Alumina production (kt)                                  1,255                  356               1,330
      Hillside Aluminium(Note 4)
      Aluminium production (kt)                                  715                  181                 720                
      Mozal Aluminium(Note 4)
      Aluminium production (kt)                                  267                   67                 273
      South Africa Energy Coal(Note 5)
      Energy coal production (kt)                             24,979                6,292     26,000 - 28,000
      Domestic coal production (kt)                           14,978                3,629     15,300 - 16,100
      Export coal production (kt)                             10,001                2,663     10,700 - 11,900
      Illawarra Metallurgical Coal
      Total coal production (kt)                               6,647                2,082               7,000
      Metallurgical coal production (kt)                       5,350                1,651               5,800
      Energy coal production (kt)                              1,297                  431               1,200
      Australia Manganese
      Manganese ore production (kwmt)                          3,349                  868               3,560
      South Africa Manganese
      Manganese ore production(Note 6) (kwmt)                  2,187                  547               2,100
      Cerro Matoso
      Payable nickel production (kt)                            41.1                 10.6                35.6
      Cannington
      Payable zinc equivalent production(Note 7) (kt)          218.2                 60.5               221.0
      Payable silver production (koz)                         12,201                2,972              11,200
      Payable lead production (kt)                             101.4                 26.5               104.0
      Payable zinc production (kt)                              51.6                 18.4                59.0

The denotation (e) refers to an estimate or forecast year.

Development and Exploration Update
-   Consistent with our strategy to partner with companies to fund early stage greenfield exploration
    opportunities, we invested US$3M during the September 2019 quarter. We directed a further US$14M
    towards exploration programs at our existing operations (US$11M capitalised), including US$1M for our EAI
    (all capitalised) and US$6M at Hermosa (all capitalised) to further increase our knowledge of the Taylor
    Deposit(Note 8) and the greater Hermosa land package(Note 9).
-   We progressed our Hermosa project pre-feasibility study which we expect to complete in the June 2020 half
    year and advanced study work at the Eagle Downs Metallurgical Coal project ahead of a final investment
    decision scheduled for the December 2020 half year.
-   We commenced exploration drilling in the Southern Areas at GEMCO during the September 2019 quarter
    following receipt of final regulatory approval. The initial program is designed to infill areas of known
    mineralisation and to test regional targets.

Worsley Alumina
(86% share)


                                                                                                   1Q20     1Q20
South32 share                          YTD          YTD     YoY        1Q19       4Q19     1Q20      vs       vs
                                      FY19         FY20                                            1Q19     4Q19

Alumina production (kt)               854          952      11%         854        996      952     11%     (4%)

Alumina sales (kt)                    850          918      8%          850      1,036      918      8%    (11%)


Worsley Alumina hydrate production increased by 4% (or 33kt) to 967kt in the September 2019 quarter as the
hydrate circuit operated at an annualised rate of 4.5mtpa (100% basis), whilst alumina saleable production
decreased by 4% (or 44kt) to 952kt as a scheduled calciner shut was completed. FY20 production guidance
remains unchanged at 3,965kt with the refinery to benefit from improved calciner availability and the drawdown of
excess hydrate stocks over the remainder of the year.

We realised a modest premium to the Platts Alumina Index(Note 10) on a volume weighted M-1 basis for alumina
sales in the September 2019 quarter. This mostly reflected the structure of specific legacy supply contracts with
our Mozal Aluminium smelter that are linked to the Platts Alumina Index on an M-1 basis, with caps and floors
embedded within specific contracts. All other alumina sales were at market based prices.

Brazil Alumina
(36% share)


                                                                                                 1Q20     1Q20
                                             YTD      YTD
South32 share                                                 YoY     1Q19     4Q19     1Q20       vs       vs
                                            FY19     FY20
                                                                                                 1Q19     4Q19

Alumina production (kt)                      305      356     17%      305      311      356      17%      14%

Alumina sales (kt)                           302      304      1%      302      374      304       1%     (19%)


Brazil Alumina saleable production increased by 14% (or 45kt) to a record 356kt in the September 2019 quarter
as the refinery benefitted from the installation of package boilers, enabling the benefits of the De-bottlenecking
Phase One project to be realised. FY20 production guidance remains unchanged at 1,330kt.

Hillside Aluminium
(100%)


                                                                                                  1Q20     1Q20
                                             YTD     YTD
South32 share                                                 YoY       1Q19     4Q19    1Q20       vs       vs
                                            FY19    FY20
                                                                                                  1Q19     4Q19

Aluminium production (kt)                    180      181      1%        180      179      181      1%       1%



                                                                                                                
Aluminium sales (kt)                        178      174     (2%)        178      191      174     (2%)    (9%)


Hillside Aluminium saleable production increased by 1% (or 2kt) to 181kt in the September 2019 quarter as the
smelter continued to test its maximum technical capacity, despite a modest impact to production from load-
shedding and the completion of a major workforce restructure in the June 2019 quarter.
                                                                                                               
                                                                                                                3
Mozal Aluminium
(47.1% share)


                                                                                                  1Q20    1Q20
                                            YTD     YTD
South32 share                                                YoY       1Q19     4Q19     1Q20       vs      vs
                                           FY19    FY20
                                                                                                  1Q19    4Q19

Aluminium production (kt)                    68      67     (1%)         68       66       67     (1%)      2%

Aluminium sales (kt)                         59      64      8%          59       70       64      8%      (9%)


Mozal Aluminium saleable production increased by 2% (or 1kt) to 67kt in the September 2019 quarter as the
smelter continued to test its maximum technical capacity, despite a modest impact to production from load-
shedding.

South Africa Energy Coal
(100%)


                                                                                                  1Q20    1Q20
                                           YTD      YTD
South32 share                                                YoY      1Q19      4Q19     1Q20       vs      vs
                                          FY19     FY20
                                                                                                  1Q19    4Q19

Energy coal production (kt)               6,170    6,292      2%      6,170     6,710    6,292     2%      (6%)

Domestic sales (kt)                       4,103    3,726    (9%)      4,103     3,336    3,726    (9%)     12%

Export sales (kt)                         1,923    1,977      3%      1,923     3,122    1,977     3%     (37%)


South Africa Energy Coal saleable production decreased by 6% (or 418kt) to 6.3Mt in the September 2019
quarter following elevated production in the prior quarter, with lower equipment availability at Klipspruit and
preparation for the upcoming wet season impacting volumes.

Domestic sales benefitted from additional volumes of a lower quality stockpiled product that had been directed to
the seaborne market in the prior quarter. Export sales declined by 37% as the lower production volumes, planned
rail network maintenance and weather related port congestion at Richards Bay Coal Terminal resulted in a build
in inventories.

We have settled the insurance claim for the incident that led to an extended outage of the Klipspruit dragline
during FY19, receiving US$98M as full and final payment from our insurers during the September 2019 quarter.

Illawarra Metallurgical Coal
(100%)


                                                                                                   1Q20     1Q20
                                            YTD      YTD
South32 share                                                 YoY       1Q19     4Q19     1Q20       vs       vs
                                           FY19     FY20
                                                                                                   1Q19     4Q19

Total coal production (kt)                 1,905    2,082      9%       1,905    1,605    2,082      9%      30%

Total coal sales (kt)(Note 11)             1,504    1,848     23%       1,504    1,516    1,848     23%      22%

Metallurgical coal production (kt)         1,515    1,651      9%       1,515    1,278    1,651      9%      29%

Metallurgical coal sales (kt)              1,178    1,482     26%       1,178    1,261    1,482     26%      18%
                                                                                                                
Energy coal production (kt)                  390      431     11%         390      327      431      11%      32%

Energy coal sales (kt)                       326      366     12%         326      255      366      12%      44%


Illawarra Metallurgical Coal saleable production increased by 30% (or 477kt) to 2.1Mt in the September 2019
quarter following the successful completion of two longwall moves in the June 2019 quarter. The Dendrobium
and Appin longwalls continue to perform strongly with an increase in the use of longwall automation. FY20
production guidance remains unchanged at 7.0Mt with longwall moves scheduled during the December 2019 and
March 2020 quarters. Achieving improved development rates at Appin to support the operation’s return to a three
longwall configuration from the June 2020 quarter remains a focus.

                                                                                                                4

Australia Manganese
(60% share)


                                                                                                   1Q20     1Q20
                                            YTD      YTD
South32 share                                                 YoY       1Q19    4Q19     1Q20       vs       vs
                                           FY19     FY20
                                                                                                   1Q19     4Q19

Manganese ore production (kwmt)              932     868     (7%)        932     718      868      (7%)      21%

Manganese ore sales (kwmt)                   884     852     (4%)        884     916      852      (4%)     (7%)

Manganese alloy production (kt)               41      28    (32%)         41      40       28     (32%)    (30%)

Manganese alloy sales (kt)                    29      32     10%          29      46       32       10%    (30%)


Australia Manganese saleable ore production increased by 21% (or 150kwmt) to 868kwmt in the September
2019 quarter. Higher utilisation rates were achieved in the primary circuit as the impact of heavy rainfall in the
prior quarter subsided. The Premium Concentrate Ore (PC02) circuit operated at approximately 120% of its
design capacity, as we continued to take advantage of favourable market conditions with our low cost PC02 fines
product contributing 11% of total production. While we continue to monitor market conditions and the potential
impact from the wet season across the remainder of the financial year, FY20 production guidance remains
unchanged at 3,560kwmt.

Manganese alloy saleable production decreased by 30% (or 12kt) to 28kt in the September 2019 quarter as one
of the four furnaces was taken offline.

South Africa Manganese
(60% share)


                                                                                                  1Q20     1Q20
                                            YTD     YTD
South32 share                                                YoY       1Q19     4Q19     1Q20       vs       vs
                                           FY19    FY20
                                                                                                  1Q19     4Q19

Manganese ore production(Note 6)
                                            515     547      6%         515      572      547       6%      (4%)
(kwmt)

Manganese ore sales(Note 6) (kwmt)          487     544     12%         487      573      544      12%      (5%)

Manganese alloy production (kt)              11      16     45%          11       22       16      45%     (27%)

Manganese alloy sales (kt)                   16      13    (19%)         16       22       13     (19%)    (41%)


South Africa Manganese saleable ore production decreased by 4% (or 25kwmt) to 547kwmt in the September
2019 quarter as a planned maintenance shut was completed at our high grade underground Wessels mine. We
continued to take advantage of favourable market conditions by selling lower quality fines products and utilising
higher cost trucking as an alternative route to market. While we continue to monitor market conditions FY20
production guidance remains unchanged at 2,100kwmt.

Manganese alloy saleable production decreased by 27% (or 6kt) to 16kt in the September 2019 quarter.


                                                                                                                 
Cerro Matoso
(99.9% share)


                                                                                                     1Q20       1Q20
                                            YTD        YTD
South32 share                                                    YoY     1Q19     4Q19      1Q20       vs         vs
                                           FY19       FY20
                                                                                                     1Q19       4Q19

Payable nickel production (kt)             10.7       10.6      (1%)     10.7     10.6      10.6      (1%)         0%

Payable nickel sales (kt)                  10.9       10.0      (8%)     10.9     10.8      10.0      (8%)       (7%)


Cerro Matoso payable nickel production was unchanged at 10.6kt in the September 2019 quarter as mining rates
increased in line with plan, resulting in a lower contribution of stockpiled ore feed. FY20 production guidance
remains unchanged at 35.6kt with the operation scheduled to undertake a major furnace refurbishment in the
June 2020 quarter.

Sales declined by 7% during the September 2019 quarter due to the timing of shipments. Our ferronickel product
sells with reference to the LME Nickel index price on a M+1 or M+2 basis and attracts product discounts that
typically widen in percentage terms during periods of elevated pricing.


                                                                                                                         5
Cannington
(100% share)


                                                                                                          1Q20       1Q20
                                          YTD        YTD
South32 share                                                    YoY       1Q19       4Q19     1Q20        vs         vs
                                          FY19       FY20
                                                                                                          1Q19       4Q19

Payable zinc equivalent
                                          56.1       60.5         8%        56.1      60.1      60.5        8%         1%
production(Note 7) (kt)

Payable silver production (koz)          3,185      2,972        (7%)      3,185     3,253      2,972      (7%)       (9%)

Payable silver sales (koz)               3,057      2,363       (23%)      3,057     4,874      2,363     (23%)      (52%)

Payable lead production (kt)              25.8       26.5         3%        25.8      28.3       26.5       3%        (6%)

Payable lead sales (kt)                   22.5       20.6       (8%)        22.5      41.7       20.6      (8%)      (51%)

Payable zinc production (kt)              13.2       18.4        39%        13.2      14.6       18.4       39%        26%

Payable zinc sales (kt)                    8.8       18.9       115%         8.8      15.7       18.9      115%        20%


Cannington payable zinc equivalent production increased by 1% (or 0.4kt) to 60.5kt in the September 2019
quarter as a higher zinc grade offset the impact of lower silver and lead grades and reduced mill throughput
following planned maintenance.

Processed silver, lead and zinc grades met our expectations and FY20 production guidance remains unchanged
(silver 11,200koz, lead 104.0kt and zinc 59.0kt). Silver and lead sales declined by 52% and 51% respectively as
shipments normalised following the prior quarter’s recovery from the impact of significant floods in February 2019
and an operational outage at a customer impacted the timing of some sales in the September 2019 quarter.


Notes:
1.   Net cash is unaudited and should not be considered as an indication of or alternative to an IFRS measure of profitability, 
     financial performance or liquidity. From 1 July 2019 our net cash number includes the Group’s adoption of AASB 16 Leases, 
     which generally results in leases being recognised on the balance sheet, as the distinction between operating and finance 
     leases is removed. For comparability our reported net cash balance at 30 June 2019 has been adjusted to reflect the
     1 July 2019 transitional adjustment of US$140M.
2.   Net distributions from equity accounted investments includes net debt movements and dividends, which are unaudited and 
     should not be considered as an indication of or alternative to an IFRS measure of profitability, financial performance 
     or liquidity.
3.   The Colombian corporate tax rate was 40% during CY17, 37% during CY18 and is 33% in CY19. The corporate tax rate will 
     decrease on an annual basis by a percent each year, stabilising at 30% from 1 January 2022. The Mozambique operations are 
     subject to a royalty on revenues instead of income tax.
4.   Production guidance for our Hillside Aluminium and Mozal Aluminium smelters does not assume any load-shedding impacts on 
     production.                                                                                                                                              
5.   8% of South Africa Energy Coal is owned by a Broad-Based Black Economic Empowerment (B-BBEE) consortium. The interests owned 
     by the B-BBEE consortium were acquired using vendor finance, with the loans repayable to South32 via distributions attributable
     to these parties, pro rata to their share in South Africa Energy Coal. Until these loans are repaid, South32’s interest in South 
     Africa Energy Coal is accounted at 100%.
6.   Consistent with the presentation of South32’s segment information, South Africa Manganese ore production and sales have been 
     reported at 60%. The Group’s financial statements will continue to reflect a 54.6% interest in South Africa Manganese ore.
7.   Payable zinc equivalent (kt) was calculated by aggregating Revenue from payable silver, lead and zinc, and dividing the total 
     Revenue by the price of zinc. FY19 realised prices for zinc (US$2,122/t), lead (US$1,754/t) and silver (US$14.4/oz) have been 
     used for FY19, YTD FY20 and FY20e. Prior quarters have been restated to this baseline.
8.   The information that relates to the Mineral Resources of the Taylor Deposit was declared in the market announcement 
     “Hermosa Project – Mineral Resource Declaration” dated 17 June 2019 (www.south32.net) based on information compiled by Matthew 
     Readford, Competent Person. South32 confirms that it is not aware of any new information or data that materially affects the 
     information included in the original announcement. All material assumptions and technical parameters underpinning the estimates 
     in the relevant market announcement continue to apply and have not materially changed. South32 confirms that the form and context 
     in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.
9.   Information that relates to estimates of Mineral Resources for the Clark Deposit (formally the Central Deposit) of the Hermosa 
     project are foreign estimates under ASX Listing Rules and are not reported in accordance with the JORC Code. Reference should be 
     made to the clarifying statement on Mineral Resources in the market announcement “South32 to acquire Arizona Mining in agreed 
     all cash offer” dated 18 June 2018, in accordance with ASX Listing Rule 5.12. South32 is not in possession of any new information 
     or data relating to the foreign estimate that materially impacts on the reliability of the estimate or has the ability to verify 
     the foreign estimate as a Mineral Resource in accordance with the JORC Code. South32 confirms that the supporting information 
     contained in the clarifying statement in the 18 June 2018 market announcement continues to apply and has not materially changed. 
     Competent Persons have not done sufficient work to classify the foreign estimates as Mineral Resources in accordance with JORC 
     Code. It is uncertain that following evaluation and further exploration that the foreign estimates will be able to be reported as 
     Mineral Resources or Ore Reserves in accordance with the JORC Code. During FY20 we will commence a work program to increase 
     confidence in the resource to ensure that resources are reported in accordance with the JORC Code.
10.  The quarterly average of the Platts Alumina Index (FOB Australia) on the basis of a one month lag to published pricing (Month 
     minus one or “M-1”) was US$314/t in the September 2019 quarter.
11.  Illawarra Metallurgical Coal sales are adjusted for moisture and will not reconcile directly to Illawarra Metallurgical Coal 
     production.

The following abbreviations have been used throughout this report: US$ million (US$M); US$ billion (US$B); grams per tonne (g/t);
tonnes (t); thousand tonnes (kt); thousand tonnes per annum (ktpa); million tonnes (Mt); million tonnes per annum (Mtpa); ounces 
(oz); thousand ounces(koz); million ounces (Moz); thousand wet metric tonnes (kwmt); million wet metric tonnes (Mwmt); million wet 
metric tonnes per annum (Mwmt pa); thousand dry metric tonnes (kdmt).

Figures in Italics indicate that an adjustment has been made since the figures were previously reported. The denotation (e) 
refers to an estimate or forecast year.

                                                                                                                                    
                                                                                                                                    6


Operating Performance
                                          YTD     YTD
South32 share                                            1Q19    2Q19    3Q19    4Q19    1Q20
                                         FY19    FY20

Worsley Alumina (86% share)

Alumina hydrate production (kt)           959     967     959     988     921     934     967

Alumina production (kt)                   854     952     854    1,052    893     996     952

Alumina sales (kt)                        850     918     850    1,035    936    1,036    918

Brazil Alumina (36% share)

Alumina production (kt)                   305     356     305     331     308     311     356

Alumina sales (kt)                        302     304     302     317     247     374     304

Hillside Aluminium (100%)

Aluminium production (kt)                 180     181     180     180     176     179     181

Aluminium sales (kt)                      178     174     178     182     156     191     174

Mozal Aluminium (47.1% share)

Aluminium production (kt)                  68      67      68      67      66      66      67

Aluminium sales (kt)                       59      64      59      70      69      70      64

South Africa Energy Coal (100%)

Energy coal production (kt)             6,170   6,292   6,170   6,001   6,098   6,710   6,292

Domestic sales (kt)                     4,103   3,726   4,103   3,646   3,950   3,336   3,726

Export sales (kt)                       1,923   1,977   1,923   2,283   2,547   3,122   1,977

Illawarra Metallurgical Coal (100%)

Total coal production (kt)              1,905   2,082   1,905   1,935   1,202   1,605   2,082

Total coal sales (kt)(Note 11)          1,504   1,848   1,504   1,755   1,531   1,516   1,848

Metallurgical coal production (kt)      1,515   1,651   1,515   1,567    990    1,278   1,651

Metallurgical coal sales (kt)           1,178   1,482   1,178   1,349   1,256   1,261   1,482

Energy coal production (kt)               390     431     390     368     212     327     431

Energy coal sales (kt)                    326     366     326     406     275     255     366

Australia Manganese (60% share)

Manganese ore production (kwmt)           932     868     932     879     820     718     868

Manganese ore sales (kwmt)                884     852     884     856     782     916     852

Ore grade sold (%, Mn)                   46.1    45.6    46.1    45.8    45.8    46.0    45.6

Manganese alloy production (kt)            41      28      41      35      38      40      28

Manganese alloy sales (kt)                 29      32      29      47      29      46      32

South Africa Manganese (60% share)
                             
Manganese ore production(Note 6)(kwmt)    515     547     515     560     540     572     547
                       
Manganese ore sales(Note 6) (kwmt)        487     544     487     523     530     573     544

Ore grade sold (%, Mn)                   40.0    40.4    40.0    40.5    39.7    41.7    40.4
                                                                                                            
Manganese alloy production (kt)            11     16       11      22      14      22      16

Manganese alloy sales (kt)                 16     13       16      19      16      22      13


                                                                                                           7
                                                                                       
                                          YTD     YTD
South32 share                                             1Q19   2Q19    3Q19    4Q19     1Q20
                                         FY19    FY20


Cerro Matoso (99.9% share)

Ore mined (kwmt)                          613     668      613     596     645     424       668

Ore processed (kdmt)                      712     712      712     689     634     703       712

Ore grade processed (%, Ni)              1.68    1.65     1.68    1.69    1.63    1.65      1.65

Payable nickel production (kt)           10.7    10.6     10.7    10.4     9.4    10.6      10.6

Payable nickel sales (kt)                10.9    10.0     10.9    10.4     9.1    10.8      10.0

Cannington (100%)

Ore mined (kwmt)                          623     694      623     683     648     771        694

Ore processed (kdmt)                      638     656      638     606     547     704        656

Silver ore grade processed (g/t, Ag)      184     168      184     181     202     172        168

Lead ore grade processed (%, Pb)          4.9     4.9      4.9     4.7     5.6     4.8        4.9

Zinc ore grade processed (%, Zn)          2.9     3.8      2.9     3.0     3.0     3.0        3.8

Payable Zinc equivalent production
(Note 7) (kt)                            56.1    60.5      56.1   51.3    50.7     60.1      60.5

Payable silver production (koz)         3,185   2,972     3,185   2,882   2,881   3,253     2,972

Payable silver sales (koz)              3,057   2,363     3,057  3,283    1,820   4,874     2,363

Payable lead production (kt)             25.8    26.5      25.8    22.5    24.8    28.3      26.5

Payable lead sales (kt)                  22.5    20.6      22.5    24.6    12.7    41.7      20.6

Payable zinc production (kt)             13.2    18.4      13.2    13.1    10.7    14.6      18.4

Payable zinc sales (kt)                   8.8    18.9       8.8    15.9     7.2    15.7      18.9

Forward-looking statements
This release contains forward-looking statements, including statements about trends in commodity prices and currency 
exchange rates; demand for commodities; production forecasts; plans, strategies and objectives of management; capital
costs and scheduling; operating costs; anticipated productive lives of projects, mines and facilities; and provisions 
and contingent liabilities. These forward-looking statements reflect expectations at the date of this release, however 
they are not guarantees or predictions of future performance. They involve known and unknown risks, uncertainties and 
other factors, many of which are beyond our control, and which may cause actual results to differ materially from those
expressed in the statements contained in this release. Readers are cautioned not to put undue reliance on forward-looking 
statements. Except as required by applicable laws or regulations, the South32 Group does not undertake to publicly update 
or review any forward-looking statements, whether as a result of new information or future events. Past performance 
cannot be relied on as a guide to future performance.


Further information
Investor Relations                               Media Relations
Alex Volante                                     James Clothier                                    Jenny White
T +61 8 9324 9029                                T +61 8 9324 9697                                 T +44 20 7798 1773
M +61 403 328 408                                M +61 413 391 031                                 M +44 7900 046 758
E Alex.Volante@south32.net                       E James.Clothier@south32.net                      E  Jenny.White@south32.net


17 October 2019
JSE Sponsor: UBS South Africa (Pty) Ltd

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Date: 17/10/2019 08:30:00
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