By: Creamer media

Manganese Production

South32 has reported a 7% decrease in saleable manganese production for the September quarter, with output falling to 551,000 wet metric tons. This decline is attributed to scheduled underground development activity at the Wessels mine in South Africa's Northern Cape. Despite this quarterly result, the company's full-year production guidance for its South Africa Manganese operations remains unchanged at 2 million wet metric tons for the 2026 financial year (FY26), with planned maintenance scheduled for the current quarter. Financially, the manganese business contributed $36 million of the $117 million received from equity-accounted investments, with these earnings expected to bolster cash generation in the upcoming December quarter.

Aluminium Operations and Energy Uncertainty

The company's Mozal Aluminium smelter in Mozambique saw a 3% production increase, operating near its maximum capacity to produce 93,000 tons in the September quarter. However, this activity occurred under a significant cloud of uncertainty. The company had already decided to stop pot relining in August 2025 due to the unresolved status of its electricity supply beyond March 2026. While FY26 production guidance is maintained at 240,000 tons, this is contingent on operations continuing only until the current power agreement expires. South32 is actively engaging with the Mozambican government and power utilities to secure a new electricity supply, but has stated that without a solution, the Mozal smelter will likely be placed on care and maintenance.

Financial Position and Copper Performance

South32's net cash position decreased by $59 million to $64 million during the quarter. Despite this, CEO Graham Kerr described the company's financial position as strong, citing ongoing investment in the Hermosa project and $117 million in net distributions from equity-accounted investments. A significant portion of this, $81 million, was received from the Sierra Gorda copper mine in Chile, where payable copper equivalent production increased by 12% due to higher planned grades and increased molybdenum volumes.

Strategic Outlook

Looking ahead, the company remains focused on maintaining operational momentum and capitalizing on strengthening market conditions for base metals. This strategic direction is supported by the recent publication of its second climate change action plan, which outlines commitments to portfolio positioning for the energy transition, operational emissions reduction, and enhancing physical climate resilience.