By Peter Milne
Surging prices for aluminium and metallurgical coal have pushed diversified miner South32 from a loss last year to a $US2.67 billion ($3.87 billion) annual profit.
The profit is the biggest for the Perth-based miner since it was created in 2015 from a collection of BHP’s unwanted assets. Underlying earnings were boosted $US3.67 billion ($5.3 billion) by higher realised prices, including $US1.54 billion from coal used for steel making and $US1.03 billion from aluminium.
South32 is putting its growth efforts into metals for needed for the energy transition rather than coal.Credit: Will Willitts
South32 CEO Graham Kerr said shareholders would receive $US648 million ($936 million)in final dividends for the second half and $US139 million ($200 million) of special dividends. The fully franked payouts add to 17 US cents a share.
The coal-based bumper profit was announced just two days after South32 shelved a $US700 million expansion of its Dendrobium coal mine in NSW.
“We have repositioned our portfolio toward metals critical for a low-carbon future,” Kerr said on Thursday.
“We added copper to our portfolio through the acquisition of a 45 per cent interest in Sierra Gorda and doubled our low-carbon aluminium capacity with an additional shareholding in the hydropowered Mozal Aluminium smelter and the restart of our 100 per cent renewable powered Brazil Aluminium smelter.”
Kerr said he expected costs to increase across the industry and planned to offset the effect with a 14 per cent production boost this financial year and cost management.
South 32’s principal products are metallurgical coal, aluminium, alumina, manganese and nickel.
South32 shares were up 4.3 per cent or 18c to $4.41 a share in early morning trading.
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