South32 ups guidance on manganese output

Western Australia based mining and metals company South32 upped its manganese production guidance on Thursday amid increased demand and prices for the mineral.

South32's production guidance in Australia rose 6% from the three months ending March 31, while its South African operation was revised up 5% on the back of strong market demand and Australia Manganese's record operating performance.

Strong commodity prices and a partial unwind of working capital delivered a $477m increase of South32's net cash position to $1.9B after allocating a further $85M to its on-market share buy-back in the quarter.

South32 delivered a year-to-date production record at Mozal Aluminium while the smelter continued to test its maximum technical capability and also increased payable nickel production at its Cerro Matoso business by 21% as the performance of La Esmeralda continued to exceed expectations.

However, coking coal production and full-year output guidance at its Illawarra mine were revised down as a result of an extended shutdown due to its ground rehabilitation work programme.

Output guidance was expected to fall to 4.1m tonnes from its previous 4.5m figure.

Graham Kerr, S32's chief executive, said, "We delivered production records at Mozal Aluminium and Australia Manganese and have increased full-year guidance for both of our manganese operations in light of strong market demand."

"At the Appin colliery we further prioritised coal clearance and ground rehabilitation activities during the quarter, setting the foundation for a return to historical rates of production at Illawarra Metallurgical Coal of more than 8m tonnes per annum," he added.

As of 1555 BST, shares had moved ahead 1.63% to 212.40p.