S32CD South 32 Limited

   By David Winning 
 

SYDNEY--South32 Ltd. said production of most of the commodities that it digs up at operations around the world fell in its fiscal third quarter, as it began to feel an impact from government restrictions to slow the spread of the new coronavirus.

South32 experienced a big impact in South Africa where energy coal demand is weakening due to a month-long lockdown and the Richards Bay Coal export terminal has been shut. Its manganese ore and alloy operations in the country have been placed on temporary care and maintenance due to the restrictions.

South32 said manganese ore output fell by 7% to 1.31 million tons in the three months through March compared to the prior quarter, while manganese alloy output declined by 19% to 38,000 tons.

Among its other commodities, alumina output fell by 4% to 1.28 million tons in the three months through March, while aluminum production dropped by 1% to 245,000 tons and metallurgical coal output declined by 3% to 1.17 million tons. Zinc and nickel production were both higher on quarter.

Despite the broad output declines, Chief Executive Graham Kerr was upbeat. ""At our operations, we have delivered a strong operating result in the year to date, highlighted by record production at Brazil Alumina and Hillside Aluminium," he said.

On March 26, South32 suspended its share buyback program with US$121 million remaining and said it would cut around US$160 million in spending over the next 15 months as it responds to the coronavirus pandemic.

South32 said a US$150 million reduction in planned capital expenditure to sustain its operations represented a 10% cut in the year through June and an 18% reduction in the 2021 fiscal year. It would also seek to cut US$10 million from its budget for exploring for new deposits of metals and minerals.

Write to David Winning at david.winning@wsj.com

(END) Dow Jones Newswires

April 19, 2020 19:10 ET (23:10 GMT)

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