South32 boosts net cash position to $1.7bn

STRONGER commodity markets helped deliver a $33 million (R445.1m) increase in South32’s net cash position to $1.7 billion, the group said in its quarterly report released yesterday.

The mining and metals company headquartered in Australia said that this was “despite an increase in working capital, the continuation of our capital management programme and the prepayment that will increase our stake in Arizona Mining”.

South32 owns 92 percent of South Africa Energy Coal, with the remaining 8 percent held by a broad-based black economic empowerment consortium led by Pembani Holdings.

According to the quarterly report, South Africa Energy Coal saleable production decreased by 10 percent to 6 689 kilotons in the quarter to September as the company completed dragline maintenance, relocated critical mobile equipment at the Wolvekrans-Middelburg Complex (WMC) and continued to deplete existing pits.

“Following prior weather related delays, the development of new mining areas at the WMC is proceeding according to plan,” the group said. “Export sales were sequentially lower as congestion at the Richards Bay Coal Terminal was not fully cleared in the quarter.”

The group reported that its South African manganese ore production and sales were at 60 percent. It said, however, that its financial statement would continue to reflect a 54.6 percent interest in South African manganese ore.

South African manganese saleable ore production decreased by 8 percent to 496 000 wet metric tons in the quarter to September. Sales were maintained at an annualised rate of 3.5 million wet metric tons.

The group’s South Africa Aluminium saleable production was unchanged at 180 kilotons in the quarter as the smelter continued to achieve benchmark levels of current efficiency and pot line amperage. The decrease in quarterly sales reflects the scheduling of shipments between periods.

South32 said it continued to take advantage of strong market conditions by maintaining South Africa Manganese ore sales at an annualised rate of 3.5 million wet metric tons.

In May South32 acquired 45 million common shares, or about 15 percent of Arizona Mining as part of a private placement and investor rights agreement. The investor rights agreement allows South32 to acquire up to, but no more than, 19.9 percent of Arizona Mining.