Wrap Text
Quarterly Report March 2021
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
South32 Limited Quarterly Report March 2021
- Net cash increased by US$242M to US$517M in the quarter as we capitalised on our strong
operating performance combined with improving commodity prices, partially offset by the
continuation of our capital management program.
- Set a year to date production record at Brazil Alumina and remain on-track to achieve
nameplate production at Worsley Alumina following the completion of planned maintenance.
- Set a year to date production record at Australia Manganese and increased FY21 production
guidance at South Africa Manganese by 10% as we continue to respond to market conditions.
- Delivered a 17% increase in year to date production at Illawarra Metallurgical Coal with the
Appin dual longwall configuration continuing to deliver greater efficiencies.
- Increased FY21 production guidance at Cannington by a further 10% with continued strong
underground performance supporting the accelerated extraction of a higher-grade mining
sequence.
- No change to production guidance at all other operations.
- Completed the furnace refurbishment at Cerro Matoso and approved execution of the Ore Sorting
and Mechanical Ore Concentration (OSMOC) project to lift nickel processing capacity from FY23.
- Committed to provide additional financial support to underpin the sustainability of South
Africa Energy Coal under the ownership of Seriti, with the divestment and additional support
remaining conditional on Eskom Holdings SOC Limited’s final approval[note1]
“Strong operating performance across the portfolio during the quarter combined with improving
prices for most of our commodities saw our net cash position increase to US$517 million.
“During the period we returned US$90 million to our shareholders via our on-market share
buy-back bringing total returns under our capital management program to US$1.5 billion.
“We set year to date production records at Brazil Alumina and Australia Manganese. We increased
our production guidance for South Africa Manganese as we continue to respond to market conditions
and at Cannington off the back of continued strong underground performance.
“Having successfully completed a major furnace refurbishment at Cerro Matoso, we approved further
investment in a new project that will lift future nickel production.
“We continue to reshape our portfolio, moving closer to the divestment of South Africa Energy
Coal while progressing studies for our base metals development options.
“Looking ahead, we expect the global economic recovery combined with fiscal stimulus to continue,
driving a rebound in metal demand and sustaining higher prices for many of our key commodities.”
Graham Kerr, South32 CEO
Production summary
South32 share 9M YTD20 9M YTD21 YoY 3Q20 2Q21 3Q21 QoQ
Alumina production (kt) 3,911 3,934 1% 1,276 1,401 1,218 (13%)
Aluminium production (kt) 741 736 (1%) 245 248 240 (3%)
Energy coal production (kt) 18,472 16,097 (13%) 5,851 5,306 4,020 (24%)
Metallurgical coal production (kt) 4,026 4,830 20% 1,167 1,399 1,568 12%
Manganese ore production (kwmt) 4,120 4,329 5% 1,307 1,459 1,409 (3%)
Payable nickel production (kt) 30.9 23.2 (25%) 10.3 6.1 7.1 16%
Payable silver production (koz) 8,597 9,477 10% 2,433 3,130 3,484 11%
Payable lead production (kt) 80.3 90.6 13% 25.0 31.2 33.0 6%
Payable zinc production (kt) 49.8 48.2 (3%) 17.3 18.0 17.8 (1%)
Unless otherwise noted: percentage variance relates to performance during the nine months ended
March 2021 compared with the nine months ended March 2020 (YoY) or the March 2021 quarter compared
with the December 2020 quarter (QoQ); production and sales volumes are reported on an attributable
basis.
Corporate Update
- The Group’s net cash[note2] balance increased by US$242M during the quarter to US$517M at 31
March 2021 as we benefitted from strong operating performance combined with improving commodity
prices and a partial unwind in working capital. We also received US$40M in cash and US$15M in
shares from the sale of a portfolio of non-core precious metals royalties to
Elemental Royalties Corp (TSX-V: ELE) which completed in the period.
- We received net distributions[note3] of US$46M (South32 share) during the quarter from our
manganese equity accounted investments (EAI) (US$98M in the nine months ended March 2021).
Excess cash held in the EAI is expected to be distributed to partners in the June 2021 quarter.
- Our strong financial position supported the purchase of a further 42M shares via our on-market
share buy-back at an average price of A$2.78, enabling returns of US$90M in the March 2021
quarter. To 31 March 2021 the capital management program was 90% complete with US$169M remaining
to be returned to shareholders ahead of its extension or expiry on 3 September 2021[note4].
Subsequent to the end of the quarter, we paid a fully-franked ordinary dividend of US$66M in
respect of the December 2020 half year.
- Our Operating unit costs are tracking to plan at all operations on the basis of previously
disclosed exchange rate and commodity price[note5] assumptions.
- Capital expenditure guidance of US$515M (including EAI) is unchanged, with US$23M of
expenditure to be incurred at our Dendrobium Next Domain (DND) life extension project during
the June 2021 half year expected to be largely offset by the deferral of sustaining capital
expenditure at other Group operations due to COVID-19 restrictions and adverse weather.
Expenditure guidance for DND was previously withdrawn following the decision by the Independent
Planning Commission (IPC) to refuse our application for its development during the March 2021
quarter. We are currently assessing the impact of the IPC’s decision on the operation and
undertaking scaled back activity. We expect to provide a further update before the end of the
calendar year.
- Capital expenditure guidance at South Africa Energy Coal of US$64M was provided for the nine
months to 31 March 2021. Guidance is not provided for the June 2021 quarter as we continue to
progress our divestment of the operation.
- During the quarter, we committed to provide additional financial support to underpin the
sustainability of South Africa Energy Coal under the ownership of Seriti. The divestment of
South Africa Energy Coal to Seriti and additional support remains conditional on Eskom
Holdings SOC Limited’s final approval and the approval of National Treasury for amendments to
the terms of the Duvha Coal Supply Agreement[note1].
- Our geographical earnings mix will continue to have a significant bearing on our Group
effective tax rate (ETR) given differing country tax rates[note6]. Until it is sold, South
Africa Energy Coal is expected to have an ETR of 0%, with all tax assets de-recognised and no
benefit to be recorded for losses made prior to its planned divestment. Following its
divestment we expect the Group’s Underlying ETR to more closely reflect the corporate tax rates
applicable to the Group. While it is difficult to predict our ETR (excluding EAI), it is
expected to remain elevated in FY21 (H1 FY21:52.8%).
Development and Exploration Update
- We directed US$11M in the nine months ended March 2021 to regional exploration programs at
Hermosa as drilling activity that had been impacted by COVID-19 restrictions resumed. We
continue to progress our pre-feasibility study for the Taylor Deposit with work expected to
be completed in the June 2021 quarter, ahead of a market update being provided. A separate
scoping study for the Clark Deposit focussed on metallurgy and the manganese battery chemicals
market is also underway, with completion expected in H1 FY22.
- The Ambler Metals Joint Venture entered into an agreement with the Alaska Industrial Development
and Export Authority (AIDEA) for shared pre-development costs for a 340km road to access the
Ambler region. Federal permits for construction of the road have been received by AIDEA, with
pre-development costs of US$17.5M (South32 share) expected to be incurred over four years to
deliver feasibility and permitting activities, ahead of reaching a decision on construction of
the project by the end of CY24. Of this total commitment to be funded from the Joint Venture,
we expect to spend US$3.3M (South32 share) in the CY21 field season, with AIDEA having also
entered into a land access agreement with Alaska Native regional corporation Doyon, Limited
(Doyon) covering areas owned and managed by Doyon along the proposed route for the road.
- Consistent with our strategy, that includes partnering with companies to fund early stage
greenfield exploration opportunities, we invested US$12M in the nine months ended March 2021.
Although the risks associated with COVID-19 persist across a majority of our exploration
jurisdictions, our partners in the United States and Peru were able to progress drilling,
while fieldwork also resumed in Australia, Ireland and elsewhere in South America during the
March 2021 quarter.
- We directed US$28M towards exploration programs at our existing operations and development
options in the nine months ended March 2021 (US$22M capitalised), including US$2M for our EAI
(US$1M capitalised), and US$11M at Hermosa as noted above (all capitalised).
Production Summary
Production guidance 9M FY21e
FY20 YTD21 [note a] Comments
(South32 share)
Worsley Alumina
Alumina production (kt) 3,886 2,885 3,965
Brazil Alumina
Alumina production (kt) 1,383 1,049 1,370
Hillside Aluminium[note7]
Aluminium production (kt) 718 537 720
Mozal Aluminium[note7]
Aluminium production (kt) 268 199 273
South Africa Energy Coal
Energy coal production (kt) 22,672 15,007 N/A Guidance not provided as
Domestic coal production (kt) 12,552 8,581 N/A we continue to progress
Export coal production (kt) 10,120 6,426 N/A divestment of the operation
Illawarra Metallurgical Coal
Total coal production (kt) 7,006 5,920 8,000
Metallurgical coal production 5,549 4,830 6,400
(kt)
Energy coal production (kt) 1,457 1,090 1,600
Australia Manganese
Manganese ore production
(kwmt) 3,470 2,663 3,500
South Africa Manganese
Manganese ore production[note8] Guidance increased by 10%
(kwmt) 1,878 1,666 up 2,200 (subject to market demand)
Cerro Matoso
Payable nickel production (kt) 40.6 23.2 34.6
Cannington
Payable zinc equivalent
332.6 264.1 up 382.6
production[note9] (kt)
Payable silver production 11,792 9,477 up 13,700 Guidance increased by a
(koz) further 10%
Payable lead production (kt) 110.4 90.6 up 130.7
Payable zinc production (kt) 66.7 48.2 up 69.2
a. The denotation (e) refers to an estimate or forecast year. All guidance is subject to
further potential impacts from COVID-19.
Worsley Alumina
(86% share)
3Q21 3Q21
South32 share 9M 9M YoY 3Q20 2Q21 3Q21 vs vs
YTD20 YTD21 3Q20 2Q21
Alumina production (kt) 2,869 2,885 1% 936 1,047 875 (7%) (16%)
Alumina sales (kt) 2,751 2,918 6% 860 1,077 840 (2%) (22%)
Worsley Alumina saleable alumina production increased by 1% (or 16kt) to 2,885kt in the nine
months ended March 2021. Alumina hydrate production increased by 4% (or 116kt) to a record
2,989kt in the same period, with the input circuit operating above nameplate capacity of 4.6Mtpa
(100% basis).
FY21 production guidance remains unchanged at 3,965kt with the refinery expected to
drawdown established hydrate stocks following the successful completion of planned calciner
maintenance in the March 2021 quarter.
Brazil Alumina
(36% share)
3Q21 3Q21
South32 share 9M 9M YoY 3Q20 2Q21 3Q21 vs vs
YTD20 YTD21 3Q20 2Q21
Alumina production (kt) 1,042 1,049 1% 340 354 343 1% (3%)
Alumina sales (kt) 1,014 1,058 4% 336 334 384 14% 15%
Brazil Alumina saleable production increased by 1% (or 7kt) to a record 1,049kt in the nine
months ended March 2021 as the refinery continued to benefit from strong plant availability,
realising the benefits of the De-bottlenecking Phase One project.
FY21 production guidance remains unchanged at 1,370kt.
Hillside Aluminium
(100%)
3Q21 3Q21
South32 share 9M 9M YoY 3Q20 2Q21 3Q21 vs vs
YTD20 YTD21 3Q20 2Q21
Aluminium production (kt) 540 537 (1%) 178 181 176 (1%) (3%)
Aluminium sales (kt) 524 538 3% 174 172 191 10% 11%
Hillside Aluminium saleable production decreased by 1% (or 3kt) to 537kt in the nine months
ended March 2021 as the smelter continued to test its maximum technical capacity, despite the
impact from increased load-shedding. FY21 production guidance[note7] remains unchanged at 720kt.
The new energy supply agreement for the smelter is currently with the National Energy Regulator
of South Africa for review. The new agreement is to cover power supplied for a 10-year period
with a tariff that is South African rand based, and a rate of escalation linked to the South
Africa Producer Price Index.
Mozal Aluminium
(47.1% share)
3Q21 3Q21
South32 share 9M 9M YoY 3Q20 2Q21 3Q21 vs vs
YTD20 YTD21 3Q20 2Q21
Aluminium production (kt) 201 199 (1%) 67 67 64 (4%) (4%)
Aluminium sales (kt) 201 194 (3%) 65 66 64 (2%) (3%)
Mozal Aluminium saleable production decreased by 1% (or 2kt) to 199kt in the nine months ended
March 2021 with the smelter continuing to perform strongly despite the impact of load-shedding
and workforce restrictions related to COVID-19 in the quarter. Notwithstanding the ongoing impact
of restrictions, FY21 production is expected to approach guidance[note7] of 273kt.
South Africa Energy Coal
(100%)
3Q21 3Q21
South32 share 9M 9M YoY 3Q20 2Q21 3Q21 vs vs
YTD20 YTD21 3Q20 2Q21
Energy coal production (kt) 17,444 15,007 (14%) 5,659 4,980 3,764 (33%) (24%)
Domestic sales (kt) 9,632 8,552 (11%) 2,944 2,920 2,025 (31%) (31%)
Export sales (kt) 7,535 6,576 (13%) 2,681 2,210 1,879 (30%) (15%)
South Africa Energy Coal saleable production decreased by 14% (or 2.4Mt) to 15.0Mt in the nine
months ended March 2021 with reduced demand from Eskom impacting domestic sales. Export sales
declined during the March 2021 quarter, impacted by disruptions to third party rail logistics and
our decision to reduce activity in uneconomic pits to maximise margins.
Our export sales realised a discount of approximately 30% to the API4 (6,000Kcal) index[note10] in
the nine months ended March 2021, as we produced a greater share of lower calorific product.
Given the impact of lower realised prices, lower volumes, and a stronger South African rand, the
operation remained loss-making in the March 2021 quarter.
Production guidance is not provided for the June 2021 quarter as we continue to progress our
divestment of the operation, although we do expect production volumes to increase as rail logistics
normalise.
Illawarra Metallurgical Coal
(100%)
3Q21 3Q21
South32 share 9M 9M YoY 3Q20 2Q21 3Q21 vs vs
YTD20 YTD21 3Q20 2Q21
Total coal production (kt) 5,054 5,920 17% 1,359 1,725 1,824 34% 6%
Total coal sales[note11] (kt) 5,213 5,850 12% 1,594 2,087 1,823 14% (13%)
Metallurgical coal production 4,026 4,830 20% 1,167 1,399 1,568 34% 12%
(kt)
Metallurgical coal sales (kt) 4,198 4,707 12% 1,398 1,697 1,542 10% (9%)
(kt)
Energy coal production (kt) 1,028 1,090 6% 192 326 256 33% (21%)
Energy coal sales (kt) 1,015 1,143 13% 196 390 281 43% (28%)
Illawarra Metallurgical Coal saleable production increased by 17% (or 0.9Mt) to 5.9Mt in the nine
months ended March 2021 as the return to a three longwall configuration continued to deliver greater
efficiencies through the operation of alternate dual longwalls at the Appin mine and we monetised
further low-margin coal wash material. While this product attracts considerable grade and product-type
discounts to the API5 (5,500Kcal) index[note12] for our energy coal sales, the incremental volume
benefits our Operating unit costs by eliminating coal waste emplacement.
FY21 production guidance remains unchanged at 8.0Mt with a longwall move scheduled at Appin in the
June 2021 quarter.
Australia Manganese
(60% share)
3Q21 3Q21
South32 share 9M 9M YoY 3Q20 2Q21 3Q21 vs vs
YTD20 YTD21 3Q20 2Q21
Manganese ore production (kwmt) 2,616 2,663 2% 841 954 829 (1%) (13%)
Manganese ore sales (kwmt) 2,512 2,730 9% 775 871 865 12% (1%)
Manganese alloy production (kt) 81 51 (37%) 24 24 - (100%) (100%)
Manganese alloy sales (kt) 89 59 (34%) 31 33 - (100%) (100%)
Australia Manganese saleable ore production increased by 2% (or 47kwmt) to a record 2,663kwmt in the nine
months ended March 2021. The primary concentrator continued to achieve strong output despite the
impact of the wet season in the March 2021 quarter, while output from the PC02 circuit remained above
nameplate capacity, contributing 10% of total production (9M YTD20: 11%).
While we continue to monitor the potential for further impact from the wet season, FY21 production
guidance remains unchanged at 3,500kwmt.
We did not produce any manganese alloy in the March 2021 quarter following our divestment of the
TEMCO manganese alloy smelter.
South Africa Manganese
(60% share)
3Q21 3Q21
South32 share 9M 9M YoY 3Q20 2Q21 3Q21 vs vs
YTD20 YTD21 3Q20 2Q21
Manganese ore production
[note8](kwmt) 1,504 1,666 11% 466 505 580 24% 15%
Manganese ore sales[note8] (kwmt) 1,549 1,600 3% 476 586 497 4% (15%)
Manganese alloy production (kt) 48 - (100%) 14 - - (100%) 0%
Manganese alloy sales (kt) 48 11 (77%) 20 3 - (100%) (100%)
South Africa Manganese saleable ore production increased by 11% (or 162kwmt) to 1,666kwmt in the nine
months ended March 2021, as we increased volumes of higher quality premium material from our
Mamatwan mine and lifted our use of opportunistic, higher cost trucking. Ore production in the March
2021 quarter was 15% higher following completion of planned maintenance at the Mamatwan mine in the prior
quarter. March 2021 quarter ore sales volumes declined by 15%, with third party rail logistics impacted
by wet weather and shipments slipping into the June 2021 quarter following the declaration of force majeure
by Transnet.
FY21 production guidance has been increased by 10% to 2,200kwmt as we continue to respond to market
conditions by utilising higher cost trucking capacity. We will continue to monitor market demand and the
potential for further disruption due to adverse weather.
We did not produce any manganese alloy in the nine months ended March 2021 as our Metalloys smelter
remained on care and maintenance.
Cerro Matoso
(99.9% share)
3Q21 3Q21
South32 share 9M 9M YoY 3Q20 2Q21 3Q21 vs vs
YTD20 YTD21 3Q20 2Q21
Payable nickel production (kt) 30.9 23.2 (25%) 10.3 6.1 7.1 (31%) 16%
Payable nickel sales (kt) 30.6 23.2 (24%) 10.2 6.1 6.7 (34%) 10%
Cerro Matoso payable nickel production decreased by 25% (or 7.7kt) to 23.2kt in the nine months ended
March 2021 following completion of a major refurbishment at one of the furnaces in the quarter. FY21
production guidance remains unchanged at 34.6kt, having completed the furnace ramp-up to normalised
rates.
Payable nickel sales increased by 10% during the March 2021 quarter as production volumes lifted. While
our ferronickel product sells with reference to the LME Nickel index price on a M or M+1 basis it continues
to attract product discounts of approximately 10%.
Following approval to develop the low capital, higher-grade Q&P project in the December 2020 quarter,
which supported an increase in our FY21 and FY22 production guidance, the Ore Sorting and Mechanical
Ore Concentration (OSMOC) project was approved to proceed to execution during the March 2021
quarter. The OSMOC project is expected to deliver increased payable nickel production of up to 10% from
FY23 through expanded processing capacity and improvements to the upgrading circuit to lift average ore
grades[note13]. The project has an anticipated capital spend of US$24M with US$4M expected in the
June 2021 quarter.
Further to the orders issued by the Constitutional Court of Colombia in April 2018, the operation was
granted a new environmental licence in the March 2021 quarter. With this licence, and our ongoing
provision of health care to the community members, all outstanding orders issued have been satisfied and
we have moved to a monitoring phase.
Cannington
(100% share)
3Q21 3Q21
South32 share 9M 9M YoY 3Q20 2Q21 3Q21 vs vs
YTD20 YTD21 3Q20 2Q21
Payable zinc equivalent 243.4 264.1 9% 74.7 90.7 96.8 30% 7%
production[note9] (kt)
Payable silver production (koz) 8,597 9,477 10% 2,433 3,130 3,484 43% 11%
Payable silver sales (koz) 8,538 9,276 9% 2,626 3,359 2,950 12% (12%)
Payable lead production (kt) 80.3 90.6 13% 25.0 31.2 33.0 32% 6%
Payable lead sales (kt) 74.6 89.8 20% 22.8 31.9 28.4 25% (11%)
Payable zinc production (kt) 49.8 48.2 (3%) 17.3 18.0 17.8 3% (1%)
Payable zinc sales (kt) 49.7 47.7 (4%) 14.4 20.0 15.9 10% (21%)
Cannington payable zinc equivalent production increased by 9% (or 20.7kt) to 264.1kt in the nine months
ended March 2021 following strong underground mine performance which has supported the acceleration
of a higher-grade mining sequence. As a result of the continued strong operating performance and
expectation of higher grades in the June 2021 quarter we have further increased FY21 zinc equivalent production
guidance by 10% to 382.6kt (silver 13,700koz, lead 130.7kt and zinc 69.2kt). FY22 production guidance remains
unchanged at this time.
Notwithstanding the strong production performance, sales were negatively impacted in the March 2021
quarter as a result of weather related timing disruptions to rail logistics that are expected to unwind in
the June 2021 quarter.
We have initiated a pre-feasibility study to assess the potential to transition the underground mine to a
truck haulage operation, from the current truck/shaft configuration. The change in configuration is a low
cost capital option that has the potential to bring forward further higher-grade material from FY23 at
current operating costs and throughput rates.
Notes:
1. Refer to the market announcement “Agreement to Divest South Africa Energy Coal” dated 6 November 2019.
Purchaser includes Thabong Coal Proprietary Limited, a wholly-owned subsidiary of Seriti, and two trusts
for the benefit of employees and communities. Refer to the market announcement “South Africa Energy Coal
Divestment Update” dated 1 April 2021. Final material conditions include approval from Eskom Holdings SOC
Limited for the transfer of our shareholding and amendments to the terms of the Duvha Coal Supply Agreement,
with the latter also subject to National Treasury consent.
2. Net cash number is unaudited and should not be considered as an indication of or alternative to an IFRS
measure of profitability, financial performance or liquidity.
3. 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.
4. Since inception, US$1.2B has been allocated to the on-market share buy-back (585M shares at an average price of
A$2.86 per share) and US$292M returned in the form of special dividends.
5. FY21 Operating unit cost guidance includes royalties (where appropriate) and the influence of exchange rates,
and includes various assumptions for FY21, including: an alumina price of US$270/t; an average blended coal
price (including coal wash sales) of US$96/t for Illawarra Metallurgical Coal; a manganese ore price of US$4.55/
dmtu for 44% manganese product; a nickel price of US$7.51/lb; a thermal coal price of US$77/t (API4) for South
Africa Energy Coal; a silver price of US$25.15/troy oz; a lead price of US$1,952/t (gross of treatment and
refining charges); a zinc price of US$2,597/t (gross of treatment and refining charges); an AUD:USD exchange
rate of 0.75; a USD:ZAR exchange rate of 15.69; a USD:COP exchange rate of 3,594; and a reference price for
caustic soda; all of which reflected forward markets as at January 2021 or our internal expectations.
6. The primary corporate tax rates applicable to the Group for FY21 include: Australia 30%, South Africa 28%,
Colombia 31%, Mozambique 0% and Brazil 34%. The Colombian corporate tax rate is 31% in CY21 and will decrease
to 30% from 1 January 2022. The Mozambique operations are subject to a royalty on revenues instead of income tax.
7. Production guidance for Hillside Aluminium and Mozal Aluminium does not assume any load-shedding impact on
production.
8. 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.
9. Payable zinc equivalent production (kt) was calculated by aggregating revenues from payable silver, lead and zinc,
and dividing the total Revenue by the price of zinc. FY20 realised prices for zinc (US$1,416/t), lead (US$1,648/t)
and silver (US$16.5/oz) have been used for FY20, 9M YTD21 and FY21e.
10. The sales volume weighted average of the Argus McCloskey API4 Coal index 6,000Kcal NAR (FOB Richards Bay, South
Africa) on a basis of a one month lag to published pricing (Month minus one or “M-1”) was US$67/t in the nine months
ended March 2021.
11. Illawarra Metallurgical Coal sales are adjusted for moisture and will not reconcile directly to Illawarra
Metallurgical Coal production.
12. The sales volume weighted average of the Argus McCloskey API5 Coal index 5,500Kcal NAR (FOB Newcastle, Australia)
on a basis of a one month lag to published pricing (Month minus one or “M-1”) was US$42/t in the nine months ended
March 2021.
13. The information in this report that relates to the production target is based on Proved and Probable Ore Reserves
(87%), and Measured (12%) and Indicated (1%) Mineral Resources for Cerro Matoso. Mineral Resources and Ore Reserve
estimates for Cerro Matoso was declared as part of South32's Annual Resource and Reserve declaration in the Annual
Report 2020 (www.south32.net) issued on 4 September 2020 and prepared by E Espitia (MAusIMM) and N Monterroza (MAusIMM)
in accordance with the requirements of the JORC Code. South32 confirms that it is not aware of any new information or
data that materially affects the information included in the original announcement. All material assumptions and
technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not
materially changed. South32 confirms that the form and context in which the Competent Person’s findings are presented
have not been materially modified from the original market announcement. Payable nickel is calculated using long
term consensus metal prices and relative metallurgical recoveries.
The following abbreviations have been used throughout this report: US$ 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.
Operating Performance
South32 share 9M 9M 3Q20 4Q20 1Q21 2Q21 3Q21
YTD20 YTD21
Worsley Alumina (86% share)
Alumina hydrate production (kt) 2,873 2,989 963 967 1,010 1,002 977
Alumina production (kt) 2,869 2,885 936 1,017 963 1,047 875
Alumina sales (kt) 2,751 2,918 860 1,031 1,001 1,077 840
Brazil Alumina (36% share)
Alumina production (kt) 1,042 1,049 340 341 352 354 343
Alumina sales (kt) 1,014 1,058 336 378 340 334 384
Hillside Aluminium (100%)
Aluminium production (kt) 540 537 178 178 180 181 176
Aluminium sales (kt) 524 538 174 199 175 172 191
Mozal Aluminium (47.1% share)
Aluminium production (kt) 201 199 67 67 68 67 64
Aluminium sales (kt) 201 194 65 78 64 66 64
South Africa Energy Coal (100%)
Energy coal production (kt) 17,444 15,007 5,659 5,228 6,263 4,980 3,764
Domestic sales (kt) 9,632 8,552 2,944 3,006 3,607 2,920 2,025
Export sales (kt) 7,535 6,576 2,681 2,180 2,487 2,210 1,879
Illawarra Metallurgical Coal (100%)
Total coal production (kt) 5,054 5,920 1,359 1,952 2,371 1,725 1,824
Total coal sales[note11] (kt) 5,213 5,850 1,594 2,071 1,940 2,087 1,823
Metallurgical coal production (kt) 4,026 4,830 1,167 1,523 1,863 1,399 1,568
Metallurgical coal sales (kt) 4,198 4,707 1,398 1,644 1,468 1,697 1,542
Energy coal production (kt) 1,028 1,090 192 429 508 326 256
Energy coal sales (kt) 1,015 1,143 196 427 472 390 281
Australia Manganese (60% share)
Manganese ore production (kwmt) 2,616 2,663 841 854 880 954 829
Manganese ore sales (kwmt) 2,512 2,730 775 928 994 871 865
Ore grade sold (%, Mn) 44.8 44.4 44.4 43.9 44.3 44.5 44.4
Manganese alloy production (kt) 81 51 24 29 27 24 -
Manganese alloy sales (kt) 89 59 31 27 26 33 -
South Africa Manganese (60% share)
Manganese ore production[note8] (kwmt) 1,504 1,666 466 374 581 505 580
Manganese ore sales[note8] (kwmt) 1,549 1,600 476 316 517 586 497
Ore grade sold (%, Mn) 39.9 40.1 39.8 40.8 39.7 40.0 40.6
Manganese alloy production (kt) 48 - 14 5 - - -
Manganese alloy sales (kt) 48 11 20 7 8 3 -
Cerro Matoso (99.9% share)
Ore mined (kwmt) 2,041 2,064 641 798 645 825 594
Ore processed (kdmt) 2,082 1,683 693 679 698 457 528
Ore grade processed (%, Ni) 1.66 1.58 1.67 1.59 1.58 1.55 1.60
Payable nickel production (kt) 30.9 23.2 10.3 9.7 10.0 6.1 7.1
Payable nickel sales (kt) 30.6 23.2 10.2 10.0 10.4 6.1 6.7
Cannington (100%)
Ore mined (kwmt) 2,066 2,123 706 726 700 709 714
Ore processed (kdmt) 2,095 2,026 701 744 630 672 724
Silver ore grade processed (g/t, Ag) 155 175 134 161 169 179 177
Lead ore grade processed (%, Pb) 4.7 5.4 4.5 4.8 5.0 5.2 5.8
Zinc ore grade processed (%, Zn) 3.4 3.4 3.6 3.2 2.9 3.7 3.5
Payable zinc equivalent production 243.4 264.1 74.7 89.2 76.6 90.7 96.8
[note9] (kt)
Payable silver production (koz) 8,597 9,477 2,433 3,195 2,863 3,130 3,484
Payable silver sales (koz) 8,538 9,276 2,626 3,571 2,967 3,359 2,950
Payable lead production (kt) 80.3 90.6 25.0 30.1 26.4 31.2 33.0
Payable lead sales (kt) 74.6 89.8 22.8 33.5 29.5 31.9 28.4
Payable zinc production (kt) 49.8 48.2 17.3 16.9 12.4 18.0 17.8
Payable zinc sales (kt) 49.7 47.7 14.4 19.0 11.8 20.0 15.9
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. South32 cautions against reliance on any forward-looking statements or guidance,
particularly in light of the current economic climate and the significant volatility, uncertainty and disruption arising in
connect with COVID-19.
Further information
Investor Relations Media Relations
Tom Gallop Rebecca Keenan Jenny White
T +61 8 9324 9030 T +61 8 9324 9364 T +44 20 7798 1773
M +61 439 353 948 M +61 402 087 055 M +44 7900 046 758
E Tom.Gallop@south32.net E Rebecca.Keenan@south32.net E Jenny.White@south32.net
27 April 2021
Approved for release by Nicole Duncan, Company Secretary, South32 Limited
JSE Sponsor: UBS South Africa (Pty) Ltd
Date: 28-04-2021 07:05:00
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