South32, an Australia-based mining company, has announced the commencement of a comprehensive cost review across its group to counteract the impacts of inflation in the mining sector. The company reported a mixed first-quarter output performance across its range of commodities.
The cost review was initiated in the first quarter of fiscal year 2024 and is expected to result in spending cuts across South32's operations and offices for the current fiscal year and the next. Graham Kerr, Chief Executive of South32, commented on the initiative, stating, "With macroeconomic conditions creating headwinds for many of our commodities, we remain focused on driving operating performance and cost efficiencies."
Kerr further highlighted the company's strategic positioning for future growth, emphasizing its commitment to production in commodities crucial for a low-carbon future. He added, "This focus, along with our production growth in commodities critical for a low-carbon future, positions us well to capture higher margins as market conditions improve."
During the quarter, South32 observed a $299 million increase in net debt, totaling $782 million. This was primarily attributed to lower commodity prices and a temporary build in working capital.
In terms of production, South32 noted increased output of alumina, aluminum, manganese ore, and lead during the three months ending in September compared to the previous quarter. However, output of copper, metallurgical coal, nickel, zinc, and silver witnessed a decline.
Kerr concluded by expressing confidence in meeting the company's annual production guidance across all operations. He highlighted positive developments at the manganese operations, a significant 34% increase in production at Brazil Alumina, and continuous growth in low-carbon aluminum volumes.