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22 OCTOBER 2018 AL CIRCLE

South32 firm on alumina production guidance for FY 19 despite lower output in the first quarter

EDITED BY : BEETHIKA BISWAS 2MINS READ

Australian metals miner South32 Limited released production results for Q1 FY 2019 on 18 October, reporting lower outputs at both alumina and aluminium operations. In the just-ended September quarter, South32 refined 1.15 million tonnes of alumina, off by 11 per cent from the preceding quarter. Worsley Alumina contributed 854,000 tonnes which was down by 9 per cent year on year and 13 per cent from the previous quarter. Maintenance work at South32’s Worsley alumina refinery in WA affected output by some 200,000 tonnes in August. However, South32 continues to expect 3.96 million tonnes of alumina production from the refinery in FY19.

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Brazil Alumina contributed 305,000 tonnes to the total, down by 9 per cent YoY and 3 per cent QoQ. However, South32 says unplanned maintenance and power outages in the quarter have not affected Brazil Alumina’s production guidance for the year, which continues to be estimated at 1.35 million tonnes.

South32 expects its total group production to increase in FY 2019 by 5%. The company expects Worsley Alumina production to grow by 5.3%. Production in Brazil Alumina is expected to grow 3.7%.

The company signed agreements to ship stockpiled alumina hydrate in the current quarter while Worsley experiences calciner maintenance and they expect to stay profitable with this.

South32 posted a 16 per cent rise in its annual underlying earnings in FY2018, endingin June, buoyed by high prices for alumina, manganese and metcoal. Underlying operating earnings from South32’s Worsley Alumina doubled to US$422 million despite lower production due to higher alumina price. The company reported US$349 million increase in the contribution of alumina refineries to Underlying EBITDA and a 10 per cent increase in their combined operating margin to 40 per cent.  The average FOB Australia alumina price was 43 per cent higher in FY18 than FY17, which was largely driven by supply disruptions.

Based in Perth, Western Australia, South32 began in 2015 as a spin-off of BHP Billiton and the firm operates mines in Australia and South Africa.


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EDITED BY : BEETHIKA BISWAS 2MINS READ

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