Johannesburg – Resources company South32’s coal production is expected to decline further for the 2018 financial year.
This is according to the group’s quarterly report, released on Friday. The group reported a net cash balance of $1.5bn (R19.95bn), this increased from $645m (R8.5bn) reported previously.
During April South32 also announced a $500m or R6.6bn capital management programme to improve shareholder value.
The group will also be pursuing opportunities in Alaska, Australia and Peru.
South32 previously decided to walk away from a major deal in Australia, where it would have taken over Peabody Energy’s Metropolitan Colliery coal mine and its minority stake in the Port Kembla coal export terminal.
As for the group’s operations in South Africa, aluminium production increased 2% in the nine months ending in March 2017. Among the reason for this include efficiency and fewer loadshedding events. Overall the group managed to maintain a :strong performance” at its aluminium smelters.
However, saleable coal production declined by 11% in the nine months ending in March 2017, mainly due to heavy rainfall in the most recent quarter. The depletion of existing pits and delays in development of new mining areas will see a 2.5 metric ton reduction in production for 2018.
The group also anticipates a significant increase in operating unit costs which will result from the reduced production.
Contrarily manganese ore production increased by 23% in the nine months ending in March 2017, mainly due to favourable market conditions, the group explained.
However, managanese alloy saleable production decreased by 18% over the period. Alloy sales in the March 2017 quarter were affected by the timing of shipments, explained the group.