South32 says to maintain lower aluminium output in S. Africa

Australian miner South32 said it plans to run its South African aluminium division at current reduced rates until at least mid-2016, as it wrestles with a sector-wide downturn.

In September, South32 suspended the operation of 22 smelting pots, or electrolytic cells, equivalent to 3 percent of the unit's total aluminium-making capacity, in response to a deterioration in markets for the metal.

The pots would remain offline for at least the remainder of fiscal 2016, ending June 30, the company said at a briefing after the release of its half-year results.

"Any decision will be determined by where prices go," said Mike Fraser, S32's chief operating officer for the Africa region.

The production loss is expected to amount to 18,000 tonnes of aluminium by the end of June.

South32 produced 352,000 tonnes of aluminium in first half fiscal 2016, steady on a year ago, but its average sales price fell 30 percent to $1,642 a tonne.

Goldman Sachs this week said the aluminium market was facing its biggest fundamental shock in a generation. Last year plummeting prices led to worldwide production cuts of around 5.5 million tonnes with the bulk, about 4 million tonnes, in China.

South32 on Thursday reported underlying half-year earnings of $26 million and a $1.7 billion loss after impairment charges, mostly related to its manganese and energy coal businesses.