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QUARTERLY REPORT
September 2022
• Our share of aluminium production increased by 9% in the September 2022 quarter, as our Southern African smelters
continued to test their maximum technical capacity and the Brazil Aluminium smelter was successfully restarted
• We completed planned calciner maintenance at Worsley Alumina and Brazil Alumina
• We achieved an 11% increase in copper equivalent production1 at Sierra Gorda, benefitting from higher copper
grades
• We progressed productivity projects at our other base metals operations, with the transition to 100% truck haulage
at Cannington and the Ore Sorting and Mechanical Ore Concentration project at Cerro Matoso expected to deliver
increased volumes in H2 FY23
• We had a strong start to the year in manganese, tracking ahead of our production guidance, as GEMCO achieved
higher primary production and our low-cost PC02 circuit continued to operate above design capacity
• We have revised production guidance down by 5% at Illawarra Metallurgical Coal to 7.0Mt, following an extended
longwall move and the impact of industrial action at our Appin mine during the September 2022 quarter
• All other production guidance is unchanged, with 13% copper equivalent production2 growth now expected in FY23
• We finalised new industrial agreements at our Appin mine at Illawarra Metallurgical Coal and Hillside Aluminium,
subsequent to the end of the quarter
• We completed the sale of four non-core royalties for up to US$200M, unlocking latent value in our portfolio3
• We returned US$784M in fully-franked ordinary and special dividends subsequent to the end of the quarter,
with a further US$200M remaining to be returned via our capital management program
South32 Chief Executive Officer, Graham Kerr: “Highlights during the September 2022 quarter included an
11 per cent increase in copper equivalent production at the Sierra Gorda copper mine in Chile, a nine per cent increase
in aluminium production and a six per cent increase in manganese ore production at GEMCO.
We maintain a strong outlook with 13 per cent production growth expected in FY23.
“During the quarter, we announced that we would not proceed with an investment in the Dendrobium Next Domain
project at Illawarra Metallurgical Coal, increasing our capacity to direct capital towards other opportunities,
including our world class development options in North America.
“We advanced development studies and critical path infrastructure at our Hermosa project in Arizona.
We expect to complete the selection phase of the pre-feasibility study for the battery-grade manganese Clark deposit
by the end of CY22 and make a final investment decision for the zinc-lead-silver Taylor deposit in mid CY23.
“We returned US$50M to shareholders via our on-market share buy-back and finished the quarter with a net cash position
of US$446M, with a further US$784M returned in October 2022 via fully-franked ordinary and special dividends.
“Our strong balance sheet and disciplined approach to capital management enables us to continue to make returns to
shareholders while investing in our portfolio of growth options focused on metals critical to a low-carbon future.”
Production summary
YTD YTD
South32 share YoY 1Q22 4Q22 1Q23 QoQ
FY22 FY23
Alumina production (kt) 1,278 1,257 (2%) 1,278 1,361 1,257 (8%)
Aluminium production (kt) 248 279 13% 248 255 279 9%
Payable copper production (kt) – 19.0 N/A – 16.9 19.0 12%
Payable silver production (koz) 3,493 2,748 (21%) 3,493 2,836 2,748 (3%)
Payable lead production (kt) 31.9 24.6 (23%) 31.9 25.8 24.6 (5%)
Payable zinc production (kt) 15.4 14.0 (9%) 15.4 15.4 14.0 (9%)
Payable nickel production (kt) 9.6 9.6 0% 9.6 10.8 9.6 (11%)
Metallurgical coal production (kt) 1,575 1,270 (19%) 1,575 1,380 1,270 (8%)
Manganese ore production (kwmt) 1,505 1,460 (3%) 1,505 1,469 1,460 (1%)
Unless otherwise noted: percentage variance relates to performance during the September 2022 quarter compared with the September 2021 quarter (YoY), or the September
2022 quarter compared with the June 2022 quarter (QoQ); production and sales volumes are reported on an attributable basis.
CORPORATE UPDATE
• In September 2022, we published our Annual Reporting Suite, which this year included our Climate Change
Action Plan (CCAP). Our CCAP includes a new goal4 of net zero Scope 3 greenhouse gas emissions by 2050 and a
commitment not to develop or invest in greenfield metallurgical coal projects. Our CCAP will be the subject of a
non-binding advisory resolution at our 2022 Annual General Meeting.
• Net cash5 declined by US$92M to US$446M during the September 2022 quarter following the allocation of a further
US$50M to our on-market share buy-back and tax payments of US$243M, including US$111M in relation to our
acquisition of Sierra Gorda. We also experienced a modest build in working capital as the collection of receivables
was more than offset by an increase in finished goods inventory and we made one-off payments that were accrued
in the prior period.
• We received net distributions6 of US$54M (South32 share) from our manganese equity accounted investments (EAI)
during the September 2022 quarter following the payment of income tax (US$58M, 100% basis), and royalties at
Australia Manganese (US$84M, 100% basis) in respect of the June 2022 half year.
• In relation to the aforementioned tax payment for Sierra Gorda, ~€92M (~US$94M at the payment date) relates to
pre-closing tax liabilities which we intend to seek to recover from the vendors.
• Our FY23 Underlying effective tax rate (ETR) is expected to reflect the corporate tax rates and earnings of the
jurisdictions in which we operate7, as well as the inclusion of our manganese business and Sierra Gorda in
Underlying earnings on a proportional consolidation basis (including royalty related taxes for Australia Manganese
and Sierra Gorda).
• We spent US$50M purchasing a further 19M shares at an average price of A$3.98 per share via our on-market share
buy-back. Subsequent to the end of the period, we also paid a fully-franked ordinary dividend of US$646M and a
fully-franked special dividend of US$138M in respect of the June 2022 half year. Our US$2.3B capital management
program is 91% complete with US$200M remaining to be returned ahead of its extension or expiry on
1 September 20238.
• On 23 August 2022, we announced that we would not proceed with an investment in the Dendrobium Next Domain
(DND) project at Illawarra Metallurgical Coal following our consideration of recently completed study work and
extensive analysis of alternatives considered for the complex9. We will focus on continuing to optimise the
Dendrobium mine within approved mining areas (Areas 3A, 3B and 3C). As a result of our decision not to invest in
the DND project, we expect to record a non-cash asset write-off of approximately US$50M (post-tax ~US$35M)
in relation to study and other project related costs. This charge will be excluded from Underlying earnings in our
financial results for the December 2022 half year.
• On 19 July 2022, we completed the sale of four non-core base metal royalties to Anglo Pacific Group PLC
(now known as Ecora Resources PLC [Ecora Resources]) for up to US$200M, including US$103M in cash
(US$48M received at completion and US$55M to be paid in six quarterly instalments), US$82M of Ecora Resources
shares, and contingent payments of up to US$15M3. Following completion, we hold a 16.9% equity interest in
Ecora Resources. We expect to make tax payments associated with the transaction of ~US$58M across FY23.
• Consistent with our focus on adding prospective base metals options, we acquired a 9.9% equity interest in
Aldebaran Resources Inc. (Aldebaran Resources) for US$8M. Aldebaran Resources’ key asset is an option to acquire
a controlling interest in the Altar copper project in Suan Juan, Argentina. This investment increases our exposure to
a highly prospective region, where we have existing greenfield exploration partnerships with
Minsud Resources Corp. and Sable Resources Ltd.
South32 Quarterly Report September 2022 Page 2 of 13
DEVELOPMENT AND EXPLORATION UPDATE
Hermosa project
• The feasibility study for the Taylor Deposit remains on-track to support a planned final investment decision in
mid CY23.
• The selection phase of the Clark pre-feasibility study is on-track for completion in late CY22. Subsequent to the end
of the quarter, we commenced phase two metallurgical test work and bulk sample collection to support pilot plant
production from mid CY23. We continue to evaluate options to accelerate the development pathway for Clark,
supported by the decision of the United States Government to invoke the Defense Production Act for the production
of critical minerals including manganese, and ongoing discussions with potential customers and
end-users of battery-grade manganese.
• Dewatering is a critical path item which will enable access to both the Taylor and Clark orebodies. During the quarter,
we progressed drilling of the first two dewatering wells and construction of the second water treatment plant,
which remains on-track for commissioning in the June 2023 quarter.
• Growth capital expenditure at the Hermosa project was US$46M during the September 2022 quarter,
with US$290M expected in FY23.
• We directed US$3M to capitalised exploration during the September 2022 quarter, as we drilled two holes at our
copper-lead-zinc-silver Peake prospect10, with exploration results expected in the June 2023 half year as we
complete planned exploration programs. We expect to commence drilling at the Flux prospect11 in early CY23,
following the receipt of approvals. Capitalised exploration of US$28M is expected in FY23 as we execute planned
programs across Taylor, Clark and our highly prospective regional land package.
Ambler Metals project
• We invested US$6M at our Ambler Metals joint venture in the September 2022 quarter, as we completed the CY22
summer exploration program and progressed work on the pre-feasibility study for the Arctic Deposit.
• The CY22 summer exploration program comprised further infill drilling at the Arctic Deposit and drill testing of
regional exploration targets in the Ambler Belt.
• Further to the temporary suspension of the right-of-way permits for the Ambler Access Road issued to the
Alaska Industrial Development and Export Authority, we expect the United States Bureau of Land Management to
publish the draft Final Environmental Impact Statement in mid CY23.
Greenfield exploration
• We invested US$13M in greenfield exploration programs across our partnerships and own properties in the
September 2022 quarter. We expect to invest US$44M in FY23 as we complete multiple drilling and field programs
targeting base metals across Australia, USA, Canada, Argentina, Peru and Ireland.
Other exploration
• We directed US$15M (US$11M capitalised) towards exploration programs at our existing operations and
development options during the September 2022 quarter, including US$3M at the Hermosa project
(noted above, all capitalised), US$6M at Ambler Metals (noted above, all capitalised), US$1M for our manganese EAI
(nil capitalised) and US$1M for our Sierra Gorda EAI (US$1M capitalised).
South32 Quarterly Report September 2022 Page 3 of 13
PRODUCTION SUMMARY
Production guidance
FY22 3M YTD FY23 FY23e(a) Comments
(South32 share)
Worsley Alumina
Calciner maintenance
completed in Q1 FY23
Alumina production (kt) 3,991 920 4,000
Further calciner maintenance
scheduled in Q3 FY23
Brazil Alumina (non-operated)
Alumina production (kt) 1,297 337 1,395
Brazil Aluminium (non-operated)
Expect ~25kt in H1 FY23 and
Aluminium production (kt) 0.3 8.3 100 ~75kt in H2 FY23, as the
smelter ramps-up
Hillside Aluminium12
Aluminium production (kt) 714 179 720
Mozal Aluminium12,13
Aluminium production (kt) 278 92 370
Sierra Gorda (non-operated)
Payable copper equivalent production1 (kt) 30.6 22.6 89.0
Payable copper production (kt) 25.3 19.0 71.8
Payable molybdenum production (kt) 0.4 0.2 1.5
Payable gold production (koz) 9.6 7.8 29.9
Payable silver production (koz) 253 180 582
Cannington
Lower planned volumes in
Payable zinc equivalent production14 (kt) 224.2 46.1 236.1
H1 FY23 as we relocate
crushing infrastructure to
Payable silver production (koz) 12,946 2,568 13,500 surface, as part of our
transition to 100% truck
Payable lead production (kt) 120.6 24.6 122.0 haulage
FY23 guidance remains
Payable zinc production (kt) 64.5 14.0 72.0
skewed to H2 FY23
Cerro Matoso
Lower planned volumes in
H1 FY23 as we commission
Payable nickel production (kt) 41.7 9.6 43.5 the OSMOC project, which is
on-track for completion in
Q2 FY23
Illawarra Metallurgical Coal
Total coal production (kt) 6,509 1,595 ↓ 7,000 Guidance reduced by 5%
Metallurgical coal production (kt) 5,712 1,270 ↓ 6,000 (from 7.4Mt) with lower Appin
Energy coal production (kt) 797 325 ↑ 1,000 volumes in Q1 FY23
Australia Manganese
Manganese ore production (kwmt) 3,363 898 3,400
South Africa Manganese
Manganese ore production (kwmt) 2,069 562 2,000
a. The denotation (e) refers to an estimate or forecast year. All guidance is subject to further potential impacts from COVID-19.
South32 Quarterly Report September 2022 Page 4 of 13
WORSLEY ALUMINA (86% SHARE)
1Q23 1Q23
YTD YTD
South32 share YoY 1Q22 4Q22 1Q23 vs vs
FY22 FY23
1Q22 4Q22
Alumina production (kt) 1,006 920 (9%) 1,006 1,030 920 (9%) (11%)
Alumina sales (kt) 924 885 (4%) 924 1,118 885 (4%) (21%)
Worsley Alumina saleable production decreased by 11% (or 110kt) to 920kt in the September 2022 quarter as we
completed planned calciner maintenance. FY23 production guidance remains unchanged at 4,000kt with the refinery
expected to deliver production above nameplate capacity of 4.6Mt (100% basis), benefitting from embedded
improvement initiatives.
Sales decreased by 21% in the September 2022 quarter, which reflected lower product availability and the timing of
shipments. We realised a circa 8% premium to the Platts Alumina Index15 on a volume-weighted M-1 basis for alumina
sales in the September 2022 quarter as our realised prices continued to reflect elevated global freight rates (which are
also reflected in Operating unit costs).
While we have not experienced any production impacts to date, we continue to monitor the performance of our domestic
third-party coal suppliers following production disruptions during the winter. As part of this work, we are reviewing
options to import low-calorific coal to supplement our domestic supply and rebuild our available stockpiles, with first
shipments expected to be received during the December 2022 quarter. We do not currently expect a material impact
on our FY23 Operating unit cost guidance of US$296/t16, with the incremental cost of imported coal expected to be
offset by the benefit of a weaker Australian dollar.
BRAZIL ALUMINA (36% SHARE)
1Q23 1Q23
YTD YTD
South32 share YoY 1Q22 4Q22 1Q23 vs vs
FY22 FY23
1Q22 4Q22
Alumina production (kt) 272 337 24% 272 331 337 24% 2%
Alumina sales (kt) 247 313 27% 247 367 313 27% (15%)
Brazil Alumina saleable production increased by 2% (or 6kt) to 337kt in the September 2022 quarter as the refinery
recovered from weather-related disruptions in the prior quarter, partially offset by planned calciner maintenance.
FY23 production guidance remains unchanged at 1,395kt.
We realised a circa 9% premium to the Platts Alumina Index15 on a volume-weighted M-1 basis for alumina sales in the
September 2022 quarter as our realised prices continued to reflect elevated global freight rates (which are also reflected
in Operating unit costs).
We commenced work on the refinery’s De-bottlenecking Phase Two project during the September 2022 quarter. The
project is expected to increase nameplate production rates by approximately 4% to 1.45Mt (South32 share) from
H1 FY26, with anticipated capital expenditure of ~US$40M (South32 share) between FY23 and FY25.
South32 Quarterly Report September 2022 Page 5 of 13
BRAZIL ALUMINIUM (40% SHARE)
1Q23 1Q23
YTD YTD
South32 share YoY 1Q22 4Q22 1Q23 vs vs
FY22 FY23
1Q22 4Q22
Aluminium production (kt) – 8.3 N/A – 0.3 8.3 N/A 2,667%
Aluminium sales (kt) – 3.3 N/A – – 3.3 N/A N/A
Brazil Aluminium saleable production was 8.3kt in the September 2022 quarter following the successful restart of the
first two potlines at the smelter. FY23 production guidance remains unchanged at 100kt, with ~25kt expected in
H1 FY23 and ~75kt in H2 FY23 as the first two potlines continue to ramp-up and potline three is expected to restart
in late CY22. First sales of aluminium metal were achieved during the September 2022 quarter.
HILLSIDE ALUMINIUM (100% SHARE)
1Q23 1Q23
YTD YTD
South32 share YoY 1Q22 4Q22 1Q23 vs vs
FY22 FY23
1Q22 4Q22
Aluminium production (kt) 180 179 (1%) 180 179 179 (1%) 0%
Aluminium sales (kt) 160 162 1% 160 198 162 1% (18%)
Hillside Aluminium saleable production was unchanged at 179kt in the September 2022 quarter as the smelter continued
to test its maximum technical capacity despite the impact of elevated load-shedding. FY23 production guidance remains
unchanged at 720kt12. Following the end of the quarter, we finalised a new collective employment agreement at
Hillside Aluminium, with a term of three years to 2025.
Sales decreased by 18% in the September 2022 quarter as port congestion impacted the timing of shipments.
Subsequent to the end of the quarter, the Transnet workforce undertook industrial action, temporarily impacting our
access to third-party logistics. We continue to closely monitor the situation and will seek to mitigate the potential impact
on our aluminium sales during the December 2022 quarter.
We continued our deployment of the AP3XLE energy efficiency technology during the quarter. At Hillside Aluminium, the
technology is expected to reduce energy consumption and in turn, lower greenhouse gas emissions by approximately
150,000 to 200,000 tonnes per annum once fully deployed.
MOZAL ALUMINIUM (63.7%13 SHARE)
1Q23 1Q23
YTD YTD
South32 share YoY 1Q22 4Q22 1Q23 vs vs
FY22 FY23
1Q22 4Q22
Aluminium production (kt) 68 92 35% 68 76 92 35% 21%
Aluminium sales (kt) 55 87 58% 55 88 87 58% (1%)
Mozal Aluminium saleable production increased by 21% (or 16kt) to 92kt in the September 2022 quarter, reflecting our
increased equity share13, and the smelter continued to test its maximum technical capacity despite the impact of
elevated load-shedding. FY23 production guidance remains unchanged at 370kt12.
We continued our deployment of the AP3XLE energy efficiency technology during the quarter. At Mozal Aluminium, the
technology is expected to deliver a circa 5% increase in annual production from FY24 with no associated increase in
power consumption.
South32 Quarterly Report September 2022 Page 6 of 13
SIERRA GORDA (45% SHARE)
1Q23 1Q23
YTD YTD
South32 share YoY 1Q22 4Q22 1Q23 vs vs
FY22 FY23
1Q22 4Q22
Payable copper equivalent production1 (kt) – 22.6 N/A – 20.3 22.6 N/A 11%
Payable copper production (kt) – 19.0 N/A – 16.9 19.0 N/A 12%
Payable copper sales (kt) – 19.2 N/A – 16.6 19.2 N/A 16%
Sierra Gorda payable copper equivalent production1 increased by 11% (or 2.3kt) to 22.6kt in the September 2022 quarter.
Plant throughput was ~48Mt on an annualised basis (100% basis) and we continued work on the plant de-bottlenecking
project, designed to sustainably lift throughput capacity to ~50Mtpa (100% basis) from the December 2022 quarter.
We realised a higher average copper grade of 0.45% in the September 2022 quarter (Q4 FY22: 0.40%) in-line with plan,
with an average copper grade of approximately 0.41% expected across FY23. FY23 payable copper equivalent
production1 guidance of 89.0kt remains unchanged (copper 71.8kt, molybdenum 1.5kt, gold 29.9koz and silver 582koz).
We realised a payable copper price of US$2.92/lb during the September 2022 quarter, net of treatment and refining
charges and provisional pricing adjustments.
CANNINGTON (100% SHARE)
1Q23 1Q23
YTD YTD
South32 share YoY 1Q22 4Q22 1Q23 vs vs
FY22 FY23
1Q22 4Q22
Payable zinc equivalent production14 (kt) 58.1 46.1 (21%) 58.1 48.9 46.1 (21%) (6%)
Payable silver production (koz) 3,493 2,568 (26%) 3,493 2,668 2,568 (26%) (4%)
Payable silver sales (koz) 2,718 1,704 (37%) 2,718 3,362 1,704 (37%) (49%)
Payable lead production (kt) 31.9 24.6 (23%) 31.9 25.8 24.6 (23%) (5%)
Payable lead sales (kt) 25.3 18.7 (26%) 25.3 31.0 18.7 (26%) (40%)
Payable zinc production (kt) 15.4 14.0 (9%) 15.4 15.4 14.0 (9%) (9%)
Payable zinc sales (kt) 14.3 14.9 4% 14.3 16.1 14.9 4% (7%)
Cannington payable zinc equivalent production14 decreased by 6% (or 2.8kt) to 46.1kt in the September 2022 quarter
due to a planned reduction in crushing capacity. We deployed temporary mobile crushers to enable the relocation of
underground crushing infrastructure to surface, as part of the operation’s transition to 100% truck haulage.
The new configuration is expected to bring higher-grade material forward in the mine plan.
FY23 production guidance (silver 13,500koz, lead 122.0kt and zinc 72.0kt, or 236.1kt payable zinc equivalent
production14) is unchanged, with volumes remaining skewed toward H2 FY23 as we complete the relocation of crushing
infrastructure to surface in the December 2022 quarter.
Payable silver and lead sales decreased by 49% and 40% respectively in the September 2022 quarter, which reflected
lower product availability and the timing of shipments.
South32 Quarterly Report September 2022 Page 7 of 13
CERRO MATOSO (99.9% SHARE)
1Q23 1Q23
YTD YTD
South32 share YoY 1Q22 4Q22 1Q23 vs vs
FY22 FY23
1Q22 4Q22
Payable nickel production (kt) 9.6 9.6 0% 9.6 10.8 9.6 0% (11%)
Payable nickel sales (kt) 10.4 9.0 (13%) 10.4 11.9 9.0 (13%) (24%)
Cerro Matoso payable nickel production decreased by 11% (or 1.2kt) to 9.6kt in the September 2022 quarter due to a
planned reduction in average nickel grade (Q1 FY23: 1.63%, Q4 FY22: 1.71%), ahead of execution of the
Ore Sorting and Mechanical Ore Concentration (OSMOC) project. The OSMOC project is on-track to be completed during
the December 2022 quarter, delivering additional volumes to mitigate natural grade decline through expanded
processing capacity and improvements to the upgrading circuit17. FY23 production guidance remains unchanged
at 43.5kt. Separately, the OSMOC project is expected to support the extension of the mining contract by 15 years,
to 2044, subject to certification and a payment of approximately US$44 million to the National Mining Agency.
Sales decreased by 24% in the September 2022 quarter which reflected lower product availability. Our ferronickel
product typically attracts a discount to the LME Nickel price index on a volume weighted M or M+1 basis, with this
discount further widening in the September 2022 quarter. We expect elevated discounts to persist in the near-term due
to additional global supply of class two nickel.
ILLAWARRA METALLURGICAL COAL (100% SHARE)
1Q23 1Q23
YTD YTD
South32 share YoY 1Q22 4Q22 1Q23 vs vs
FY22 FY23
1Q22 4Q22
Total coal production (kt) 1,888 1,595 (16%) 1,888 1,583 1,595 (16%) 1%
Total coal sales18 (kt) 1,708 1,390 (19%) 1,708 1,886 1,390 (19%) (26%)
Metallurgical coal production (kt) 1,575 1,270 (19%) 1,575 1,380 1,270 (19%) (8%)
Metallurgical coal sales (kt) 1,490 1,193 (20%) 1,490 1,588 1,193 (20%) (25%)
Energy coal production (kt) 313 325 4% 313 203 325 4% 60%
Energy coal sales (kt) 218 197 (10%) 218 298 197 (10%) (34%)
Illawarra Metallurgical Coal saleable production increased by 1% (or 12kt) to 1,595kt in the September 2022 quarter.
Higher output from the Dendrobium mine during the September 2022 quarter was mostly offset by lower production at
the Appin mine as difficult strata conditions resulted in an extended longwall move. Separately, workforce disruptions
ahead of the successful negotiation of the new Enterprise Agreement at Appin resulted in reduced labour productivity
during the September 2022 quarter. Following the end of the quarter, we finalised the new
Enterprise Agreement at Appin, with a term of four years to 2026.
While the complex has returned to optimised rates, we have reduced FY23 production guidance by 5% to 7.0Mt
(metallurgical coal 6.0Mt and energy coal 1.0Mt) due to the production impacts at Appin during the September 2022
quarter. We do not currently expect a material impact on our FY23 Operating unit cost guidance of US$116/t16, with the
benefit of a weaker Australian dollar expected to offset the impact of lower volumes.
Coal sales decreased by 26% in the September 2022 quarter which reflected lower product availability for our coal blend.
South32 Quarterly Report September 2022 Page 8 of 13
AUSTRALIA MANGANESE (60% SHARE)
1Q23 1Q23
YTD YTD
South32 share YoY 1Q22 4Q22 1Q23 vs vs
FY22 FY23
1Q22 4Q22
Manganese ore production (kwmt) 897 898 0% 897 844 898 0% 6%
Manganese ore sales (kwmt) 906 779 (14%) 906 860 779 (14%) (9%)
Australia Manganese saleable production increased by 6% (or 54kwmt) to 898kwmt in the September 2022 quarter as
improved yields supported higher primary concentrator output, while our low-cost PC02 circuit continued to operate
above its design capacity, delivering approximately 10% of production (Q4 FY22: 11%). FY23 production guidance
remains unchanged at 3,400kwmt, subject to the impacts from the wet season.
Sales decreased by 9% in the September 2022 quarter due to the timing of shipments.
SOUTH AFRICA MANGANESE (ORE 54.6% SHARE)
1Q23 1Q23
YTD YTD
South32 share YoY 1Q22 4Q22 1Q23 vs vs
FY22 FY23
1Q22 4Q22
Manganese ore production (kwmt) 608 562 (8%) 608 625 562 (8%) (10%)
Manganese ore sales (kwmt) 515 473 (8%) 515 581 473 (8%) (19%)
South Africa Manganese saleable production decreased by 10% (or 63kwmt), from record levels in the June 2022 quarter,
to 562kwmt in the September 2022 quarter. Despite the impact of reduced third-party rail and port availability,
with Transnet declaring force majeure following industrial action subsequent to the end of the quarter, production
volumes are currently tracking in-line with our FY23 production guidance of 2,000kwmt. While we continue to monitor
and respond to the situation, we expect third-party rail capacity to progressively improve over the December 2022
quarter after Transnet reached a new wage agreement with its majority union on 17 October 2022.
South32 Quarterly Report September 2022 Page 9 of 13
NOTES
1. Payable copper equivalent production (kt) was calculated by aggregating revenues from payable copper, molybdenum, gold and silver, and dividing
the total Revenue by the price of copper. FY22 realised prices for copper (US$3.50/lb), molybdenum (US$18.48/lb), gold (US$1,934/oz) and silver
(US$23.5/oz) have been used for FY22, Q1 FY23 and FY23e.
2. Expected Group payable copper equivalent production in FY23, compared to FY22, calculated by applying FY22 realised prices for all operations
(except for Brazil Aluminium which is based on FY22 average index prices for aluminium) to our FY23 production guidance and FY22 actual volumes,
respectively.
3. Refer to market release “South32 unlocks up to US$200M in value from non-core royalty sale” dated 12 July 2022. Includes US$103M in cash
payments, US$82M of Ecora Resources PLC shares issued on completion and contingent payments of up to US$15M. The US$103M cash payment
comprises US$48M paid on completion, and US$55M payable in six equal quarterly instalments over the 18 months from completion. The contingent
payment is triggered if the West Musgrave project achieves commercial production, and throughput and commodity price-related conditions are
met prior to an agreed expiry date.
4. Goal is defined as an ambition to seek an outcome for which there is no current pathway(s), but for which efforts will be pursued towards addressing
that challenge, subject to certain assumptions or conditions. Target is defined as an intended outcome in relation to which we have identified one or
more pathways for delivery of that outcome, subject to certain assumptions or conditions.
5. Net cash number is unaudited and should not be considered as an indication of or alternative to an IFRS measure of profitability, financial performance
or liquidity.
6. Net distributions from our material equity accounted investments (manganese and Sierra Gorda) includes net debt movements and dividends, which
are unaudited and should not be considered as an indication of or alternative to an IFRS measure of profitability, financial performance or liquidity.
7. The corporate tax rates of the geographies where the Group operates include: Australia 30%, South Africa 27%, Colombia 35%, Mozambique 0%,
Brazil 34% and Chile 27%. The South African corporate tax rate reduced to 27% from 1 July 2022. The Mozambique operations are subject to a royalty
on revenues instead of income tax. Sierra Gorda is subject to a royalty related tax based on the amount of copper sold and the mining operating
margin, the rate is between 5% and 14% for annual sales over 50kt of refined copper.
8. Since inception, US$1.5B has been allocated to the on-market share buy-back (714M shares at an average price of A$2.96 per share)
and US$525M returned in the form of special dividends.
9. Refer to market release “Dendrobium Next Domain Update” dated 23 August 2022.
10. Peake Prospect Exploration Target: The information in this announcement that relates to the Exploration Target for Peake Prospect is extracted
from “Hermosa Project Update” published on 17 January 2022 and is available to view on www.south32.net. The information was prepared by a
Competent Person in accordance with the requirements of the JORC Code. South32 confirms that it is not aware of any new information or data that
materially affects the information included in the original market announcement. South32 confirms that the form and context in which the Competent
Person’s findings are presented have not been materially modified from the original market announcement.
11. Flux Exploration Target: The information in this announcement that relates to the Exploration Target for Flux is extracted from “South32 Strategy
and Business Update” published on 18 May 2021 and is available to view on www.south32.net. The information was prepared by a Competent Person
in accordance with the requirements of the JORC Code. South32 confirms that it is not aware of any new information or data that materially affects
the information included in the original market announcement. South32 confirms that the form and context in which the Competent Person’s findings
are presented have not been materially modified from the original market announcement.
12. Production guidance for Hillside Aluminium and Mozal Aluminium does not assume any load-shedding impact on production.
13. Refer to market release “South32 completes acquisition of additional shareholding in Mozal Aluminium” dated 31 May 2022. Historical production
and sales figures have not been restated for our increased ownership (presented on a 47.1% basis to 31 May 2022).
14. Payable zinc equivalent production (kt) was calculated by aggregating revenues from payable silver, lead and zinc, and dividing the total Revenue by
the price of zinc. FY22 realised prices for zinc (US$3,248/t), lead (US$2,046/t) and silver (US$21.0/oz) have been used for FY22, Q1 FY23 and FY23e.
15. The sales volume weighted average of the Platts Alumina Index (FOB Australia) on the basis of a one month lag to published pricing (Month minus
one or “M-1”) was US$344/t in the September 2022 quarter.
16. FY23 Operating unit cost guidance includes royalties (where appropriate) and the influence of exchange rates, and includes various assumptions for
FY23, including: an alumina price of US$364/t; an average blended coal price of US$265/t for Illawarra Metallurgical Coal; an AUD:USD exchange rate
of 0.69; and a reference price for caustic soda; which reflect forward markets as at June 2022 or our internal expectations.
17. The information in this report that relates to the production target is based on Proved (75%) and Probable (25%) Ore Reserves for Cerro Matoso.
Mineral Resources and Ore Reserve estimates for Cerro Matoso was declared as part of South32's Annual Resource and Reserve declaration in the
Annual Report 2022 (www.south32.net) issued on 9 September 2022 and prepared by I Espitia (MAusIMM) and N Monterroza (MAusIMM) in accordance
with the requirements of the JORC Code. South32 confirms that it is not aware of any new information or data that materially affects the information
included in the original announcement. All material assumptions and technical parameters underpinning the estimates in the relevant market
announcement continue to apply and have not materially changed. South32 confirms that the form and context in which the Competent Person’s
findings are presented have not been materially modified from the original market announcement. Payable nickel is calculated using long-term
consensus metal prices and relative metallurgical recoveries.
18. Illawarra Metallurgical Coal sales are adjusted for moisture and will not reconcile directly to Illawarra Metallurgical Coal production.
The following abbreviations have been used throughout this report: US$ million (US$M); US$ billion (US$B); € (Euro); (grams per tonne (g/t); tonnes (t);
thousand tonnes (kt); thousand tonnes per annum (ktpa); million tonnes (Mt); million tonnes per annum (Mtpa); ounces (oz); thousand ounces (koz);
million ounces (Moz); thousand wet metric tonnes (kwmt); million wet metric tonnes (Mwmt); million wet metric tonnes per annum (Mwmt pa); dry metric
tonne unit (dmtu); thousand dry metric tonnes (kdmt).
Figures in Italics indicate that an adjustment has been made since the figures were previously reported. The denotation (e) refers to an estimate or forecast
year.
South32 Quarterly Report September 2022 Page 10 of 13
OPERATING PERFORMANCE
YTD YTD
South32 share 1Q22 2Q22 3Q22 4Q22 1Q23
FY22 FY23
Worsley Alumina (86% share)
Alumina hydrate production (kt) 997 957 997 997 972 1,014 957
Alumina production (kt) 1,006 920 1,006 973 982 1,030 920
Alumina sales (kt) 924 885 924 1,022 910 1,118 885
Brazil Alumina (36% share)
Alumina production (kt) 272 337 272 359 335 331 337
Alumina sales (kt) 247 313 247 379 306 367 313
Brazil Aluminium (40% share)
Aluminium production (kt) – 8.3 – – – 0.3 8.3
Aluminium sales (kt) – 3.3 – – – – 3.3
Hillside Aluminium (100% share)
Aluminium production (kt) 180 179 180 178 177 179 179
Aluminium sales (kt) 160 162 160 176 179 198 162
Mozal Aluminium (63.7%13 share)
Aluminium production (kt) 68 92 68 68 66 76 92
Aluminium sales (kt) 55 87 55 67 66 88 87
Sierra Gorda (45% share)
Ore mined (Mt) – 8.8 – – 4.7 9.0 8.8
Ore processed (Mt) – 5.4 – – 2.3 5.2 5.4
Copper ore grade processed (%, Cu) – 0.45 – – 0.45 0.40 0.45
Payable copper equivalent production1 (kt) – 22.6 – – 10.3 20.3 22.6
Payable copper production (kt) – 19.0 – – 8.4 16.9 19.0
Payable copper sales (kt) – 19.2 – – 11.1 16.6 19.2
Payable molybdenum production (kt) – 0.2 – – 0.2 0.2 0.2
Payable molybdenum sales (kt) – 0.3 – – 0.1 0.5 0.3
Payable gold production (koz) – 7.8 – – 2.3 7.3 7.8
Payable gold sales (koz) – 7.7 – – 3.0 6.9 7.7
Payable silver production (koz) – 180 – – 85 168 180
Payable silver sales (koz) – 179 – – 111 171 179
South32 Quarterly Report September 2022 Page 11 of 13
YTD YTD
South32 share 1Q22 2Q22 3Q22 4Q22 1Q23
FY22 FY23
Cannington (100%)
Ore mined (kwmt) 750 639 750 725 637 641 639
Ore processed (kdmt) 687 518 687 698 681 552 518
Silver ore grade processed (g/t, Ag) 185 179 185 169 188 177 179
Lead ore grade processed (%, Pb) 5.5 5.6 5.5 4.9 5.9 5.5 5.6
Zinc ore grade processed (%, Zn) 3.2 3.7 3.2 3.6 3.4 3.8 3.7
Payable zinc equivalent production14 (kt) 58.1 46.1 58.1 55.9 61.3 48.9 46.1
Payable silver production (koz) 3,493 2,568 3,493 3,217 3,568 2,668 2,568
Payable silver sales (koz) 2,718 1,704 2,718 4,000 2,818 3,362 1,704
Payable lead production (kt) 31.9 24.6 31.9 28.3 34.6 25.8 24.6
Payable lead sales (kt) 25.3 18.7 25.3 38.0 27.9 31.0 18.7
Payable zinc production (kt) 15.4 14.0 15.4 17.3 16.4 15.4 14.0
Payable zinc sales (kt) 14.3 14.9 14.3 18.5 17.3 16.1 14.9
Cerro Matoso (99.9% share)
Ore mined (kwmt) 1,058 1,332 1,058 1,358 1,310 1,141 1,332
Ore processed (kdmt) 620 666 620 715 690 678 666
Ore grade processed (%, Ni) 1.76 1.63 1.76 1.71 1.73 1.71 1.63
Payable nickel production (kt) 9.6 9.6 9.6 10.7 10.6 10.8 9.6
Payable nickel sales (kt) 10.4 9.0 10.4 9.7 9.8 11.9 9.0
Illawarra Metallurgical Coal (100%)
Total coal production (kt) 1,888 1,595 1,888 1,257 1,781 1,583 1,595
Total coal sales18 (kt) 1,708 1,390 1,708 1,547 1,465 1,886 1,390
Metallurgical coal production (kt) 1,575 1,270 1,575 1,192 1,565 1,380 1,270
Metallurgical coal sales (kt) 1,490 1,193 1,490 1,387 1,358 1,588 1,193
Energy coal production (kt) 313 325 313 65 216 203 325
Energy coal sales (kt) 218 197 218 160 107 298 197
Australia Manganese (60% share)
Manganese ore production (kwmt) 897 898 897 807 815 844 898
Manganese ore sales (kwmt) 906 779 906 831 775 860 779
Ore grade sold (%, Mn) 44.2 44.3 44.2 44.2 44.1 44.2 44.3
South Africa Manganese (54.6% share)
Manganese ore production (kwmt) 608 562 608 445 391 625 562
Manganese ore sales (kwmt) 515 473 515 579 495 581 473
Ore grade sold (%, Mn) 40.3 38.5 40.3 38.7 40.5 39.4 38.5
South32 Quarterly Report September 2022 Page 12 of 13
Forward-looking statements
This release contains forward-looking statements, including statements about trends in commodity prices and currency exchange rates; demand for
commodities; production forecasts; plans, strategies and objectives of management; capital costs and scheduling; operating costs; anticipated productive
lives of projects, mines and facilities; and provisions and contingent liabilities. These forward-looking statements reflect expectations at the date of this
release, however they are not guarantees or predictions of future performance. They involve known and unknown risks, uncertainties and other factors,
many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this
release. Readers are cautioned not to put undue reliance on forward-looking statements. Except as required by applicable laws or regulations, the South32
Group does not undertake to publicly update or review any forward-looking statements, whether as a result of new information or future events. Past
performance cannot be relied on as a guide to future performance. South32 cautions against reliance on any forward looking statements or guidance,
particularly in light of the current economic climate and the significant volatility, uncertainty and disruption arising in connection with COVID-19.
FURTHER INFORMATION
INVESTOR RELATIONS MEDIA RELATIONS
Ben Baker Jamie Macdonald Miles Godfrey
M +61 403 763 086 M +61 408 925 140 M +61 415 325 906
E Ben.Baker@south32.net E Jamie.Macdonald@south32.net E Miles.Godrey@south32.net
Approved for release to the market by Graham Kerr, Chief Executive Officer
JSE Sponsor: The Standard Bank of South Africa Limited
24 October 2022
South32 Limited
(Incorporated in Australia under the Corporations Act 2001 (Cth))
(ACN 093 732 597)
ASX / LSE / JSE Share Code: S32; ADR: SOUHY
ISIN: AU000000S320
South32 Quarterly Report September 2022 Page 13 of 13
