South32 says exports may not resume from Northern Territory manganese mine until early 2025
South32 says it is looking for alternative ways to export manganese from its Groote Eylandt mine after Cyclone Megan wiped out its port infrastructure.
South32 says its Northern Territory manganese operations could be out of action for up to a year after Cyclone Megan wiped out the company’s wharf and port infrastructure at Groote Eylandt in March.
The mining major suspended operations at the high-grade manganese mine as the cyclone hit in mid-March, flooding the mining pits and significantly damaging South32’s port facilities and a haulage bridge that links the mine to the processing plant.
South32 said it had begun engineering studies on ways to restore its port operations and the haulage bridge, as the company pumped out pits which were flooded after Cyclone Megan dumped 680mm of rain over the NT mining operation.
The company said it did not expect to begin exports from Groote Eylandt until the March quarter of 2025. It not likely to know the full cost of repairing the damage until its engineering studies were completed.
South32 said it was considering alternative ways to ship ore from the mining operation, with a view to restoring at least part of its capacity to export manganese ahead of the full repair of its shipping berths.
The miner is also weighing its options for claims with its insurers for the costs of business interruption and repairing the damage.
Meanwhile the company’s South African manganese operations delivered an improved performance on previous periods, hitting record production of 1.64 million tonnes for the first nine months of the financial year.
RBC Capital Markets analyst Kaan Peker said he expected the repair work to cost about $200m, and for some export capacity to be restored within six months, most likely through barging ore to bigger vessels offshore.
Shares in the company closed up 5.6 per cent, or 18c, at $3.37 each despite the bad news on its manganese mine, after South32 delivered an upbeat assessment of the rest of its global operations.
Foul weather also slowed the shipment of base metals from South32’s Cannington mine in Queensland, but South32 said payable zinc equivalent production lifted 19 per cent compared to the same period in 2023, with production up 15 per cent for the first nine months of the financial year.
The company said its net debt for the period fell $US154m to $US937m as the company sold down aluminium inventory from its Hillside operations in South Africa.
As with other major nickel miners outside Indonesia, the future of South32’s Cerro Matoso operation in Columbia remains in doubt as the company weighs its options for the ferro nickel business. The company expects to have made a decision on the mine’s future by the time it delivers its full-year financial results in August.
South32 left its full-year guidance unchanged.
The company is ramping up spending at its new US base metals project, Hermosa, spending $US68m in the March period on removing water from the first part of its development, and preparing to begin work on the first major shaft that will service the underground mine.
South32 is developing the Taylor zinc-lead deposit at Hermosa, which has expected capital costs of about $US2.16bn and should deliver first production in the first half of 2027.
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