Top member reports
No meetings
Consensus community valuation
XXXXXX
Average Intrinsic Value
XXXXXX
Undervalued by
The consensus valuation is for members only and has been removed from this chart. Click for membership options.
Contributing Members
Content is delayed by one month. Upgrade your membership to unlock all content. Click for membership options.
#Khoemacau withdrawal
stale
Added 6 months ago

Maybe not surprised South32 has pulled out of the race to acquire Khoemacau

https://www.mining.com/web/south32-sees-competitive-process-for-botswana-copper-mine-a-bit-rich/

Australian diversified miner South32 said while it has plenty of regional expertise, the sales process for Botswana’s Khoemacau copper mine was quite competitive.

“It’s a competitive process, a bit rich for our blood to be honest,” CEO Graham Kerr told an earnings call on Thursday.

South32 not willing to pay premium on what looks like a quality copper asset in a safe African jurisdiction with a mine life of over 20 years and getting bigger. I would argue this is even safer than Chile. I even rate Botswana better than North America which is home to the South32 Hermosa project.

Does Kerr know that just like high PE stocks, to buy quality you need to sometimes pay more than you should?

https://www.khoemacau.com/our-portfolio/current-operations

This leaves a few Chinese and South African firms (Impala Platinum, Exxaro Resources and Sibanye Stillwater) in the running who perhaps understand the value more than South32. I'm betting the Chinese will eventually acquire Khoemacau as they seem pretty desperate to get their hands on anything they can't get in Oz. As an aside, the Chinese do part-own Northparkes in NSW with the Japanese which is quite funny.

I'm out of South32 last week on the news. Really wanted South32 to get Khoemacau but this withdrawal I see as a negative. It also possibly means they want to spend energy on other things on their plate they need to clean up rather than get distracted in taking another acquisition. Or maybe they got burnt by the Hermosa writedown and are now being more cautious.

Read More
Valuation of $3.50
stale
Added 7 months ago

27/08/2023 - Valuation updated based on recent straw and reading of MS reports. With factors beyond the control of South32 due to ageing assets, the business is becoming more of a coal/aluminum producer with a small portion towards copper until Hermosa comes on line in the next decade (if it passes FID). Expect a bit of volatility in the meantime. From the MS report, DCF valuation of Hermosa is 32c/sh.

Aug 2022- Recent quarterly shows S32 had hit most of all guidance forecasts and improved on last year. Haven't accounted for revenue yet but likely to be higher.

Accounting for a possible special dividend from the royalty sale and recession, price could be close to $4 - 0.20 =3.80 over the next 12 months (ie: July 2023)

Read More
#Business Model/Strategy
stale
Added 7 months ago

Price targets looking at my US Morgan Stanley account (which I just unlocked again today thanks to the support person on the phone in America!)

Morningstar:

We retain our fair value estimate for no-moat South32 of AUD 4.10 per share. Elevated metallurgical prices saw the division comprise around one-third of fiscal 2023 EBITDA, but we forecast metallurgical coal to be less than 10% of EBITDA at the end of our forecast period in fiscal 2028. This is driven by our view that metallurgical coal prices will revert to our assumed midcycle price of roughly USD 150 per metric ton from 2027 based on our estimate of the marginal cost of production, down from spot of roughly USD 260 per metric ton. Lower metallurgical coal production of around 4.7 metric tons in fiscal 2028, down from 5.4 million in fiscal 2023, also provides an assist. This is consistent with South32’s strategy to transition its portfolio to more metals such as aluminum, alumina, copper, and zinc, that are more likely to benefit from decarbonization and electrification. We forecast alumina and aluminum to comprise roughly 30% of fiscal 2028 EBITDA, followed by nickel (17%), manganese (14%), and silver (13%). Copper and zinc comprise the remainder, with the latter driven by the company developing its Taylor zinc-lead-silver project in Arizona, which we think is likely

Morgan Stanley:

Financial results in-line, but FY24 cost guidance showing inflation pressures: S32's financial result were broadly in-line with MSe/consensus while the full year dividend was slightly weaker against both MSe/consensus (see here). Upon updating our model we see little change (~1.5%) to our FY23 EPS. FY24 production guidance was largely maintained except for a slight downgrade (5,000kt vs prev: 5,300kt, met + thermal) at Illawarra coal driven by four planned longwall moves for FY24. S32 also provided FY24 cost guidance and upon adjusting for currencies shows the majority of assets continue to face inflationary pressures. We see these factors driving a ~33% cut to our FY24e EPS (from 16cps to 11cps) and a ~10% cut to our FY25e EPS (from 20cps to 18cps).

Sierra Gorda a key upcoming catalyst for S32: With the fourth grinding line expansion expecting an FID in 2HFY24 and S32 today confirming a large scale (1.89bt @ 0.41% CuEq) copper deposit at Sierra Gorda, we have now incorporated the expanded throughput of 57-58Mtpa (~15-20%) into our estimates. We see the project costing S32 ~US$550m over 3 years from FY25-27 and see the additional grinding circuit ramping up in FY28 to for the site to reach a total milling rate of ~57Mtpa by FY30. The expansion as a result drives a higher base case (and Bull and Bear) valuation of A$3.70/sh (prev: A$3.65/sh).

Why are we OW? Despite cost inflation in FY24, we see FY25 remaining largely consistent vs. our previous forecasts and also in-line with management's updated FY25 guidance. In coming months (2QFY24) we are expecting an FID for the Taylor deposit and with the recent write-down of the asset, we are currently valuing Hermosa at book value (~US$1b), and see the market having captured the potential upside risks to capex, leaving room for potential upside. In addition, we await the FID on the fourth grinding line at Sierra Gorda, where in our opinion, we have been conservative in our estimates as upside potential could come from higher recoveries, operating cost efficiencies, better grades and a faster build. While the stock trades close to our base case, we see the potential for a positive surprise sustaining our OW rating and as such shows ~13% potential upside to our new PT of A$4.15/sh (prev: A$3.90/sh), which benefits from a higher Bull Case.

There's lots to digest from these reports. Above is just a summary.

There's not much on the overall Aluminium supply/demand dynamics. Ignoring the news about closure of some European smelters, China is still flooding the market with Aluminium and showing they are in control of pricing like lots of other commodities. I'm using the below tweet as a reference:

da1942592362f45b75d6fc53a7e70c6255e893.png

[held]

Read More
#Fin / Outlook Year Ended 30 Ju
stale
Added 7 months ago

The Group’s statutory profit after tax decreased by US$2,842M to a loss of US$173M in FY23, including the US$1,300M non-cash impairment of Hermosa’s Taylor deposit, while Underlying earnings decreased by US$1,686M to US$916M. 

a6a8f9f76a67b141ffda0e1b0105594c1c5a37.png

559bfd0dd021df2fc812bf1265c828893e2574.png

09e4ba21ad96436df531f97d4b108fae165e4e.pngRet


Return (inc div)   1yr: -1.63%   3yr: 24.53% pa   5yr: 6.35% pa

51ce86603230b20b11d6aa54b13e266659af25.png


Forecast Ex Div Date: 15/09/2023 (22 days away)

Read More
#Hermosa Project Update
stale
Added 8 months ago

South32 has taken a non-cash impairment expense for Hermosa project of ~US$1,300M in relation to the Taylor deposit. The impairment expense will be excluded from FY23 Underlying earnings.

Current value of the Hermosa project as at 30 June 2023 will be ~US$1,001M, with ~US$482M for the Taylor deposit . The carrying value of the Clark deposit and regional exploration land package is unchanged at ~US$519M.

The impairments were as a result of the following:

* Covid-19 restrictions impacting development and access

* Significant dewatering requirements to allow safe access to the orebody further delayed the timeline to first production and required an investment of ~US$365M for critical path orebody dewatering

* Expected higher pre-production capital expenditure compared to pre-feasibility study estimates as result of rising input prices including steel, cement and electrical components

Interestingly, South32 paid US 1.3 billion to acquire Arizona mining in 2018 for the Hermosa deposit.

Still it appears Graham Kerr still sees a few positives

“The Hermosa project has the potential to sustainably produce commodities critical for a low-carbon future, from multiple development options, for decades to come.

“We are disappointed by the delays resulting from the impact of COVID, the significant dewatering requirements and current inflationary market conditions.

“We continue to see substantial opportunity to unlock additional value across Taylor, Clark and our highly prospective regional exploration package and that optionality is not included in today’s impairment assessment.

“The feasibility study for Taylor remains on track, and will benefit from the 41 per cent increase in the Measured Mineral Resource announced today. The Taylor deposit remains open in several directions, offering the potential for further growth.

“Beyond Taylor, Clark is well positioned to supply high-purity manganese sulphate monohydrate (HPMSM) for the electric vehicle supply chain in North America, creating a second development option at Hermosa.

“In addition, we are encouraged by the exploration options across our regional land package, including our high priority Peake and Flux targets, with recent drilling at Peake delivering our best copper exploration results to date.”

Mining is a tough industry!

[held]

Read More
#Business Model/Strategy
stale
Added 8 months ago

Old article but South32 eyeing Botswana asset

Sandfire also interested.


3c2ba27eb1e2c59054c90df3371f648ea90a21.png

[held]

Read More
#2023 Strategy/Business Update
stale
Last edited 10 months ago

16th May 2023: South32 released this today: S32-Strategy-and-Business-Update-16-May-2023.PDF

Many companies are trying to do a bit of greenwashing these days, so look greener, cleaner, and more sustainable, and I guess the more cynical among us might think that's exactly what S32 are doing here with this Strategy and Business Update, however, I have seen them moving in this direction since soon after they were spun out of BHP, starting with announcing early that they intended to fully exit thermal (energy) coal, which they have now done. There is a lot to unpack with this presentation, but I will highlight just 4 slides that I found particularly interesting:

67dafb5f7581a5ae3fc98b345d82559bd88697.png

4307c4dbce8b354c8457e816c03b85518eaacc.png

84f073dd54d93990b3f3538b45f7fbc9e3dd48.png

Their commodity split is shown above (right hand bottom corner of slide 8) - you may notice that they have no pink - Battery grade manganese - currently contributing to their revenue (in H1 of FY23) - however that will change when Hermosa Clark becomes operational (see below).

4f4224ceca72b064213e328f3641c216ec718d.png

So while they are already producing plenty of Aluminium (Bauxite, Alumina and Aluminium), Nickel, Manganese ore, Copper, Zinc, Lead, Silver and Metallurgical (Met) Coal, as shown on slide 8, they also have plenty of growth projects in the works, as shown above on slide 9, which will include battery grade manganese (from Hermosa Clark).

Similarly to BHP, the management team at S32 are only interested in owning and running mines that are operating within the lowest quartile of the cost curve, so their mines are either firmly within that quartile already, or are heading down towards it. Running large scale mines that have some of the cheapest costs in the world gives S32 a couple of clear competitive advantages; one being economies of scale, and the second being that they will remain profitable at much lower commodity prices when many of their competitors will be underwater (losing money instead of making money at those prices). When mining companies start to go broke, the ones with the lowest costs will last the longest.

Another clear advantage I see with South32 compared to many other large and small miners is that they are very careful and sensible with their capital allocation. They do not engage in empire building - meaning getting bigger just to be bigger - they do not overpay for assets - they buy assets that are a strategic fit for them, and they look after their shareholders, as evidenced by the active on-market share buybacks they have done, and their generous dividend policy. And I like the metals that they produce. I like that mix, and I don't see it anywhere else within the one company.

It should be obvious, but I'll say it anyway. Disclosure: I hold S32 shares in real life in two portfolios (one is my SMSF) - although not here on SM at this point.

Home - South32

Read More
Valuation of $4.12
stale
Added 10 months ago

Revised 9/5/23:

at 9/5/23 price ~ $4,20 = 0.693 x 6.06 (current eps $0.693) x (current pe 6.06%)

June 2023 Predict - Eps 40.31cps

*(from cents to $$) $0.4031 = 40.31/100

*pe: Predict: 8.72%

June 2023 Valuation Revised down: $3.515 = 0.4031 x 8.72

then June 2024 Outlook : eps 48.0 cps


(1/12/22) 2023 Analyst projection ( c to $$ )_ eps = 0.625cps

Keeping with the trend of a pe ~ 6.59%

2023 Valuation: $4.118 = 0.625 x 6.59


Read More
#Hermosa Project Update
stale
Added 10 months ago

Potential to generate substantial local economic benefits from the sustainable development of a new critical minerals project Clark’s proposed development is aligned with our purpose to make a difference by developing natural resources, improving people’s lives now and for generations to come. It has the potential to strengthen the domestic supply of critical minerals and create many new jobs in Santa Cruz County, Arizona, where nearly 25 percent of its residents live below the poverty line.

We are working proactively with Native American tribes that have cultural ties to the project area to preserve cultural heritage and deliver long-term opportunities. Development of the Clark deposit has been designed to minimise its environmental impact, featuring a small footprint underground mine with efficient water use and dry-stack tailings. It will be designed applying lowcarbon principles, with future study phases to evaluate options to access renewable energy supply. These lowcarbon design principles, combined with low transport emissions due to Clark’s proximity to future EV supply chains in North America, is expected to favourably position our HPMSM product with customers seeking to address greenhouse gas emissions throughout their supply chains. Ideally positioned to supply the rapidly forming North American electric vehicle supply chain

Clark is currently the only advanced project in the US that has a visible pathway to produce battery-grade manganese for the domestic market from locally sourced ore. Based on our projected EV battery demand and chemistry assumptions, we anticipate substantial growth in demand for battery-grade manganese in North America.

Government policies that subsidise EVs are forecast to deliver a near six-fold increase in North American EV penetration levels by 2030.

Demand for battery-grade manganese is anticipated to further benefit from the adoption of manganese-rich chemistries that provide EV users with substantial cost, performance and sustainable sourcing benefits. Government policies are also incentivising the build out of battery EV supply chains in the US including the procurement of critical minerals from domestic sources. With the current available supply of battery-grade manganese to North America heavily reliant on Chinese producers, the potential development of Clark will provide a new domestic source of production to strengthen the US supply chain

71ec8b11213635d63e67239e2c949f000c8e2a.png

87b88daf307f00516c66e8f2b7e2c2e0c46780.pnge37b56a7a8bd4857e721c03c057d493b92c792.png

Read More
#Financials
stale
Added 11 months ago

For those seeing the drop in share price on Monday, South32 results came out and was all below expectations with guidance being downgraded. Looks like no one anticipated the numbers being so bad

8d3d766dd0a0d186e77e5b9b5ee8a99140b0aa.png

Source: Factset (Capital IQ pro did not have the latest report which is pretty bad considering the cost)

Share price seemed to have recovered today but it is a bit disappointing that Cannington had been impacted by flooding and South32 did not inform the market until now. Unlike nearby neighbour Capricorn, operated by 29Metals which got totally flooded, mining is continuing at Cannington but guidance reduced.

Other negative surprises include reduced production at Sierra Gorda again due to weather events and falls in Nickel production.

[held]

Read More
#Financials
stale
Added one year ago

Base metals valuation template sheet of Cannington and Sierra Gorda using the FY22 Annual report.

Think the valuation of Sierra Gorda might be a bit on the high side as I probably need to subtract the acquisition costs and contingent payments somewhere, will need to check the numbers again. So it is all preliminary and shouldn't be used as a real valuation. Cannington seems "right".

I don't have enough data yet on Sierra Gorda other than the fact that it has a 20+ year reserve and copper equivalent which is why the Mt cell is blank. So I'm taking an average of the South32 estimate production numbers in Cu eq from the qtr report and previous production of 29.5kt.

56d902e0dae291cc571e5da3756fab0281570a.png

[held]

Read More
#Industry/competitors
stale
Added one year ago

From the South32 Dec Qtr update

I can't help but think that Devlop Global mining services has something to do with the labour shortages experienced at Golden Grove (29metals) and now Cannington (South32).

a197fcf55860c6b2274708d24a7fad97207737.png

Maybe Kerr should give Beament a call?

[held]

Read More
#2022 FY Fin' Results
stale
Added 2 years ago

S32: Return (inc div)   1yr: 54.07%   3yr: 23.45% pa   5yr: 11.74% pa

DIVIDENDS The Board has resolved to pay a final dividend of US 14.0 cents per share (fully-franked) for the year ended 30 June 2022, and a special dividend of US 3.0 cents per share (fully-franked). The record date for determining entitlements to dividends is 16 September 2022; payment date is 13 October 2022. 

2924-02558001-6A1106004 (markitdigital.com)

02026d364e60d6714d19fe7ce06ce80be7ebc2.png


1269fe259bcaa48d31806e5a80b7527cfc1249.png


8f69050ef7827a092d7209bfb13d529c2e8c34.png


Read More
#Quarterly Update
stale
Added 2 years ago

FY Unit costs inline with guidance

2924-02544786-6A1100810 (markitdigital.com)

some highlights of the Quarter below:

ef43cf4d01e31beecbc828ec70ec8aae42dca8.png

Read More
#Selling Cu and Ni royalties
stale
Added 2 years ago

cf28591624b684127e06e261dfea91ffe374ba.png

30f55b664e8ffc29b642621b57d88bf5018559.png


What does this mean?

a) Is S32 short of cash and sees opportunity to get $200mill? Seems unlikely, still doing share-buy-back in June.

b) No confidence in Cu and Ni markets at this time, moving money elsewhere.

c) Final dividend in Aug/Sept, Likely to be cautious.

Read More
#Business Model/Strategy Update
stale
Added 2 years ago

Decarbonisation of the World -

From fuel based commodities for energy eg ICE cars to the Material based commodities BEV cars

91d03b100a184374f6347f4605c22d5ab154d2.png


2924-02522485-6A1092042 (markitdigital.com)

Decarbonisation - What is decarbonisation, and why do we urgently need it? (virta.global)

Uranium - Eureka's Decarbonisation Report: Uranium - Eureka Report


Read More
#ASX Announcements
stale
Last edited 2 years ago

Quarterly report released

https://www.south32.net/docs/default-source/exchange-releases/quarterly-report-march-2022.pdf?sfvrsn=c313bc61_2

South32 Maintains Guidance on production

Operating Cost Guidance Increased

Of particular note is increased working capital due to congestion in supply chain and logistics.

Read More
#Acquisition
stale
Added 2 years ago

Sierra Gorda Acquisition

South32 completes acquisition of 45% interest in Sierra Gorda.

With this transaction out of the way, it does show some of the big top tier miners are willing to pay big money to get production secured now from large mines rather than spend time developing mines and bringing them into production. In this case, the upfront payment was $1.4 bn with another 500m milestone payment if the threshold for copper production and sale prices are achieved.

Read More
#Onmarket ShareBuyBack
stale
Added 2 years ago

They did an on-market buy back of $4.59 on 21Feb22. Wow, this was pretty much an all time high.

Current trading price $4.46.

Read More
#Hermosa Project, Arizona
stale
Added 2 years ago

17-Jan-2022: Hermosa Project Update and Hermosa Project Presentation

[click on the announcement title above to read/view the announcement/presentation - there's a link to their announcement and also to their accompanying presentation]

44aed8629c75eabb7c01b12804b613e959083a.png

South32 (S32) have today updated the market on their progress at their Hermosa Project in Arizona (USA) which contains a 138Mt zinc-lead-silver sulphide Mineral Resource at Taylor and a 55Mt zinc-manganese-silver oxide Mineral Resource at Clark.

The Taylor PFS demonstrates potential for a sustainable, low cost operation with 20+ year initial resource life with a FID (Final Investment Decision) on Taylor expected in mid CY23.

The Clark scoping study has confirmed the potential to produce battery-grade manganese into rapidly-growing markets. Manganese is listed as a critical mineral in the United States.

S32 is conducting studies to consider a potential integrated development of Taylor and Clark, unlocking operating and capital synergies.

Disclosure: I hold S32 (in RL), primarily for exposure to Alumina/Aluminium, Nickel, Silver, Manganese, Lead and Zinc.

What I like most about S32 is their management, their smart capital allocation decisions, their total lack of net debt, their commodity exposure (good collection of commodities), and that their mines are mostly in the lowest quartile of the global cost curve, and those that aren't are very close to it.

Hermosa - which contains Taylor and Clark plus a highly prospective land package that they continue to explore for further viable deposits - is a low carbon, low impact option in the first quartile of the industry’s cost curve, so more of the same for S32. Located in Arizona, USA, close to infrastructure, skilled service providers and supply chains, Taylor’s large Mineral Resource remains open, while activities to unlock value from Clark and their regional exploration are continuing.

Early days at Hermosa, however they have done significant work there already, and it's going to provide a growth option for future years, assuming they make a positive FID next year (which is a fairly safe assumption unless the bottom falls out of the zinc, lead, silver and manganese markets).


Further Reading/Info/Resources:

Investor centre (south32.net)

Our commodities (south32.net)

Read More
#Thermal Coal Assets Divested
stale
Last edited 3 years ago

17-May-2021:  South Africa Energy Coal Divestment Unconditional

South32 Limited (S32) is pleased to provide the following update regarding the transfer of our 100% shareholding in South32 SA Coal Holdings Proprietary Limited (South Africa Energy Coal) to Seriti Resources Holdings Proprietary Limited (Seriti) and two trusts for the benefit of employees and communities (the Transaction).* Further to our release on 1 April 2021, we are pleased to confirm that all conditions precedent have now been fulfilled. Accordingly, the Transaction is unconditional and we expect to complete on 1 June 2021.

South32 Chief Executive Officer, Graham Kerr said “When we made the decision to exit South Africa Energy Coal, we recognised the business would continue to play an important role in supplying South Africa’s energy needs for years to come. With this in mind our vision was two-fold. First, we wanted to ensure that the business would be sustainable for the long-term, for the benefit of its employees, customers and local communities. Of equal importance was our objective for it to become a black-owned and operated business, consistent with South Africa’s transformation agenda. We believe Seriti is the right owner of South Africa Energy Coal and that the additional financial support package we have provided will underpin the future sustainability of the business.

“For South32, completion of the divestment is an important milestone that will see us significantly simplify our business, reduce our capital intensity and improve our underlying operating margins. Looking forward, we remain focussed on reshaping our portfolio with a bias to the base metals important for a low carbon future by advancing our development options in North America and continuing to invest in greenfield exploration.”

Further information

On completion of the divestment we expect to book a loss on sale of between US$125M and US$175M, while the Group’s net cash balance is expected to reduce by approximately US$180M to reflect the recognition of the vendor support package being provided to Seriti**. Notwithstanding, completion of the divestment will further strengthen our balance sheet and provide additional flexibility to the Group in respect of the future allocation of capital. Our capital management program remains on-going with US$116M remaining to be returned via our on-market share buy-back by 3 September 2021.

The loss on sale will be excluded from Underlying earnings and South Africa Energy Coal will be presented as a discontinued operation in our June 2021 full year results. Our Group Underlying effective tax rate is expected to remain elevated in a range between 35% and 45% (excluding EAI) in FY21, given the impact of losses incurred at South Africa Energy Coal. From FY22 we expect the rate to more closely reflect the corporate tax rates of the geographies where the Group operates.

Notes:

  1. (*) Refer to the market announcement “Agreement to divest South Africa Energy Coal” dated 6 November 2019. Purchaser includes Thabong Coal Proprietary Limited, a wholly-owned subsidiary of Seriti and two trusts for the benefit of employees and communities.
  2. (**) Refer to market announcement “South Africa Energy Coal Divestment Update” dated 1 April 2021 which includes details of the vendor support package to be provided.

[Disclosure: I hold S32 shares in my SMSF.  One of the reasons I like S32 ahead of BHP is I like their commodity mix - I just wish they also mined copper, but BHP kept the copper when they spun out S32.  Another reason is that both S32 and BHP have made commitments to exit thermal/energy coal, however only S32 seems serious about that promise, as evidenced by today's announcement.  It's taken 18 months, but they've finally closed this deal to divest their remaining thermal coal assets.  The only coal mining that S32 will be doing now - from July onwards (FY22) - is met (metallurgical) coal - which is a positive step forward, and a step that BHP have not yet taken, despite saying they would for the past couple of years.]

Further Reading:  https://theconversation.com/albanese-says-we-cant-replace-steelmaking-coal-but-we-already-have-green-alternatives-126599

https://ieefa.org/wp-content/uploads/2019/05/Conflating-Queenslands-Coking-and-Thermal-Coal-Industries_June-2019.pdf

https://www.thoughtco.com/what-is-metallurgical-coal-2340012

View Attachment

Read More
#Coal Mine Extension Rejected
stale
Added 3 years ago

05-Feb-2021:  https://www.australianmining.com.au/news/south32-coal-mine-extension-axed/

South32 coal mine extension axed, by Nickolas Zakharia @ www.australianmining.com.au

South32’s proposed mine life extension for the Dendrobium mine in New South Wales has been rejected by the New South Wales Government Independent Planning Commission (IPC).

The IPC found environmental impact risks are “likely to be irreversible” for the Dendrobium extension.

The extension proposed to mine coal from two new areas near Avon and Cordeaux Dams in Wollongong, extending the mine’s operations until the end of 2048 and with an additional 78 million tonnes of run-of-mine coal.

According to the IPC, expanding the two areas would threaten Greater Sydney and the Illawarra’s drinking water catchment.

However, a government assessment from the New South Wales Department of Planning, Industry and Environment previously determined the $956-million extension was “approvable” and “in the public’s interest”.

The IPC declared it did not meet its expectations for sustainability and did not meet the public’s interest.

“(After) careful examination of all the evidence and weighing all relevant considerations, the IPC has found that the longwall mine design put forward by South32 does not achieve a balance between maximising the recovery of a coal resource of state significance and managing, minimising or mitigating the impacts on the water resources and biodiversity and other environmental values of the metropolitan special area,” the IPC statement of reasons for decision read.

Other concerns about the mine design included its impact on Aboriginal cultural heritage, biodiversity, and greenhouse gas emissions.

According to the IPC, South32 did not address concerns about the proposed mine design.

“The applicant has made minor amendments; however, the impacts remain significant,” the IPC stated.

In an ASX announcement, South32 stated it is reviewing the findings from the decision.

“We are reviewing its findings and will continue to engage with key stakeholders including the New South Wales Government, relevant agencies and the community in relation to the Dendrobium next domain project ahead of providing further updates,” South32 stated.

The Dendrobium mine produces 5.2 million tonnes per annum of run-of mine coal, which is used in local and international steelmaking.

South32 stated the project extension would support continued employment of its 90 per cent local workforce.

New South Wales Minerals Council chief executive officer Stephen Galilee has called on the state government to intervene in the decision.

“The refusal of this Project will cost 700 direct local jobs at the Dendrobium mine and put the jobs of thousands more people at risk, including local contractors and suppliers, as well as thousands of jobs at the BlueScope Steelworks dependent on coal from the mine,” he said.

“The NSW Government must intervene to ensure this project is approved and can proceed, as recommended by its own Department of Planning.

“To do anything less will demonstrate a willingness to throw away billions in investment and the jobs of thousands of people at a time of significant economic need.”

--- ends ---

I hold S32 shares in my SMSF.  They are down by around ~3% so far today on the back of this as well as the falling silver price (which I've discussed over in the "Gold an an investment" forum).  Their Cannington mine in north-west Queensland, 200km south east of Mount Isa, near the township of McKinlay, is the world's largest single silver producer, representing about 6% of the world’s primary silver production.  It's not all S32 produce of course - they also produce bauxite, alumina, aluminium, nickel, manganese, lead, zinc and both types of coal - met coal and thermal/energy coal.  I prefer S32 over BHP because S32 have been more on the front foot in terms of divesting their thermal/energy coal assets - which are located in South Africa.  However, the article above is about the NSW Government knocking back S32's application to extend one of their met (metallurgical) coal mines here in Australia.  Things are changing folks, and for the better I believe!  In this particular case, concerns relating to water resources, biodiversity and other environmental issues are being seen as more important than building a bigger coal mine.  The main issue is clearly the threat to the Greater Sydney and the Illawarra’s drinking water catchment area.  Coal miners are going to face more and more roadblocks and knock-backs going forwards.  It's a dying industry, and companies need to transition away from it and into areas and/or commodities that have strong tailwinds instead of headwinds.

Read More
#ASX Announcement 21/1/21
stale
Added 3 years ago

Quarterly Report December 2020

• Achieved record year to date production at Worsley Alumina with output above nameplate capacity as the refinery benefitted from on-going improvement initiatives.

• Set a year to date production record at Brazil Alumina as the refinery continued to achieve high levels of plant availability, despite planned maintenance.

• Delivered another record for year to date ore production at Australia Manganese as the performance of our high-grade circuit improved.

• Increased production at Illawarra Metallurgical Coal by 11% in the December 2020 half year as the operation continued to benefit from the return to a three longwall configuration.

• Increased FY21 production guidance at Cannington by 5% with underground performance supporting the accelerated extraction of a higher-grade mining sequence.

• Approved an early development timetable for the low capital, higher-grade Q&P project at Cerro Matoso, increasing FY21 and FY22 production guidance by 3% and 13% respectively.

• Determined not to proceed with development of the Eagle Downs Metallurgical Coal project, with the project placed on hold while we assess options for our joint venture interest.

• Entered into a binding agreement to sell a portfolio of non-core minerals royalties to Elemental Royalties Corp.

• Progressed the sale of South Africa Energy Coal during the quarter, receiving approval from the Competition Tribunal of South Africa and advancing discussions with Eskom to meet the material outstanding conditions.

• Following the end of the quarter, completed the sale of GEMCO’s shareholding in the TEMCO manganese alloy smelter.

DISC : I hold

View Attachment

Read More
#Company Reports
stale
Added 4 years ago

20-7-2020:  Quarterly Report June 2020

[I hold S32 shares]

Read More