South32, an Australia-based miner, announced on Monday that it anticipates a 3% reduction in its full-year group output compared to previous forecasts. This downgrade is due to setbacks in its plants and power outages. However, the company remains optimistic about cost savings, as it expects first-half operating costs to align with or fall below annual estimates across most operations.
The revised guidance for the 12-month period through June 2024 takes into account the Brazil Alumina and Mozal Aluminium operations, which have been impacted, as well as weaker-than-expected molybdenum output from the Sierra Gorda mine.
Despite these challenges, South32 expresses confidence in its ability to take advantage of improved market conditions through a projected 7% production growth in the second half of FY24. This growth will be supported by the company’s ongoing commitment to cost efficiencies.
For the six months ended December 31, the company estimates that first-half operating unit costs will meet or possibly be below the projected figures for the majority of its operations. This positive outcome can be attributed to cost efficiencies and reduced raw-material input prices.
Looking ahead to the second half of the year, South32 expects costs to benefit further from a planned increase in group volumes.
