South32 Ltd. on Monday reported mixed output of the commodities it produces for its fiscal fourth quarter as it grappled with disruptions from adverse weather and labor availability, but benefited from high prices. Here are some remarks from its quarterly operational report.


On alumina output:

"Worsley Alumina saleable production increased by 1% to a record of 3.991 [million metric tons] in FY22 as the refinery delivered above its nameplate capacity (4.6 million tons per annum, 100% basis), realizing the benefit of embedded improvement initiatives and surpassing guidance expectations. Brazil Alumina saleable production decreased by 7% to 1.297 million tons in FY22 as the refinery returned to nameplate capacity (3.86 million tons per annum, 100% basis) from October 2021, following an incident in July 2021 that damaged one of the two bauxite ship unloaders at the operation. Despite the impact of local weather-related disruptions across 2H FY22, the refinery achieved 100% of FY22 production guidance."


On aluminum output:

"First [Brazil Aluminium] sales to domestic customers were made in July 2022. With a slower than anticipated ramp-up associated with the need to stabilize the electrolytic bath, we expect to provide updated FY23 production guidance with our FY22 results announcement, including revised timing to achieve nameplate production (179,000 tons per annum, our 40% share). Hillside Aluminium saleable production was largely unchanged at 714,000 tons in FY22 as the smelter achieved 99% of guidance, despite the impact of increased load-shedding. Mozal Aluminium saleable production increased by 5% to 278,000 tons in FY22."


On metallurgical coal output:

"Illawarra Metallurgical Coal saleable production decreased by 15% to 6.509 million tons in FY22 as we completed three longwall moves across Appin and Dendrobium during the year. We also stopped our opportunistic energy coal sales of low-margin coal wash material. Production volumes declined by 11% in the June 2022 quarter following adverse weather and Covid-19 related labor restrictions that also impacted the operation's ability to maintain budgeted development rates. Notwithstanding these disruptions and the volatility witnessed across seaborne coal markets, our geographically diverse customer base supported a 29% increase in sales volumes in the quarter as we drew down inventory, capturing the benefit of very strong index prices."


On manganese ore output:

"Australia Manganese saleable production decreased by 5% to 3.363 million wet tons in FY22 as weather disruptions and Covid-19 workplace restrictions prevented the rebuild of stockpiles ahead of the wet season, and contributed to adverse ore handling characteristics that resulted in a lower yield at the primary concentrator during the year. Notwithstanding these challenges in 1H FY22, saleable production increased by 4% in the June 2022 quarter and we exceeded our revised FY22 guidance by 5% as the operation benefited from improved weather conditions. South Africa Manganese saleable production was largely unchanged at 2.069 million wet tons in FY22 as we produced higher volumes of premium material from our Mamatwan mine during the year, more than offsetting the impact of scheduled maintenance in the March 2022 quarter. The operation delivered a strong finish to the year, with saleable production increasing by 60% to a record 625,000 wet tons in the June 2022 quarter following the prior period's maintenance shut, beating our FY22 guidance by 3%."


On marketing:

"Innovative logistic solutions were established across multiple operations to mitigate the impact of ongoing port congestion, tight freight markets and the broader disruption of global supply chains, contributing to our strong sales performance in the June 2022 quarter. This enabled the group to capitalize on strong markets lowering our inventory position by the end of the financial year with the working capital benefit of this work expected to be realized in the first quarter of FY23."


Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com


(END) Dow Jones Newswires

07-24-22 1940ET