South32 export sales show a 37% drop
The diversified Australian headquartered mining company said the sales declined on the lower production volumes, planned rail network maintenance and weather-related port congestion at Richards Bay Coal Terminal.
It said SAEC saleable production eased 6 percent to 6.3 million tons on lower equipment availability at Klipspruit as it prepared for the upcoming wet season impacting volumes.
“Domestic sales benefited from additional volumes of a lower quality stockpiled product that had been directed to the seaborne market in the prior quarter,” the company said. Coal business in South Africa has been loss making, recording a $504m impairment in the financial year ended June.
In August, South32 said it had closed the door on coal after choosing Seriti Resources, headed by former Optimum Coal chief executive Mike Teke as its preferred bidder for the assets. South32 chief executive Graham Kerr said yesterday that the company remained on track to provide further guidance for the fourth quarter.
“We remain on track to finalise Seriti Resources’ offer for our South Africa Energy Coal business in the coming quarter, a significant milestone in the divestment process and a further step towards reshaping our portfolio,” said Kerr.
South32 said it had settled the insurance claim for an incident that led to an extended outage of the Klipspruit dragline during the 2019 financial year, receiving $98 million (R1.46 billion) as full and final payment from insurers in the quarter under review.
The company posted marginal output increase from its Richards Bay-based aluminium smelter during the period, despite power disruptions and the completion of a restructuring of the operation.
Aluminium production at Hillside Aluminium was higher at 181 000 tons in September from 170 000 tons, while sales decreased 2 percent to 174 000 tons from 178 000 tons the prior year.
South32 said output increased as the smelter continued to test its maximum technical capacity, despite a modest impact to production from load-shedding and the completion of a major workforce restructure in the prior quarter.
The company said it had maintained annual production guidance for all of its operations, including the Hillside, saying it did not assume any load-shedding impacts on production.
Eskom on Wednesday implemented Stage 2 load shedding on system constraints.
The group posted a 4 percent drop in local manganese saleable ore production due to the planned maintenance shut-down at the Wessels underground mine.
Kerr said the company had continued to review options for the manganese alloy smelters as changes in market dynamics had reduced the attractiveness of its exposure.
South32 shares rose 1.64 percent on the JSE on Thursday to close at R25.43.