South32 makes progress with disposals


South32 makes progress with disposals

Published Date: 2021-01-22 | Source: Stephen Gunnion | Author: Stephen Gunnion

South32 makes progress with disposals

The diversified mining company is targeting the divestment of its SA Energy Coal business by the end of March.

South32 says the transformation of its portfolio of assets is gaining pace as it exits low margin operations and increases its exposure to base metals.

In a quarterly report for the period to end-December, the diversified mining company said it had made progress with the sale of its South Africa Energy Coal business after receiving approval from the Competition Tribunal for the transfer to Seriti Resources and advancing discussions with Eskom to meet other outstanding conditions. It entered into a binding agreement to sell a portfolio of non-core minerals royalties to Elemental Royalties Corp. And following the end of the quarter, its Groote Eylandt Mining Company (GEMCO) joint venture with Anglo American completed the sale of Tasmanian Electro Metallurgical Company (TEMCO) to GFG Alliance (GFG).

Year to date, South32 said it achieved record production at its Worsley Alumina operation in Australia as well as Brazil Alumina. It also delivered record year to date ore production at Australia Manganese, while its Illawarra Metallurgical Coal and Cannington operations also increased production. Saleable production from SA Energy Coal fell 5%, however, due to reduced demand from Eskom. Export sales were also lower as it suspended activity from loss-making pits in response to market conditions. It said it was targeting completion of the divestment by the end of March.

South32 said its strong financial position and operating performance enabled it to lift the suspension of its on-market share buyback programme. It spent $112 million purchasing a further 66-million shares at an average price of A$2.34 per share during the December half year.

Its shares closed 0.6% down at R30.32 yesterday.

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