South32 (ASX:S32) share price rises on robust Q1 update

Here's how this mining giant is performing…

| More on:
Three mining workers stand proudly in front of a mine smiling because the BHP share price is rising

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The South32 Ltd (ASX: S32) share price is on the move this morning.

At the time of writing, the mining giant's shares are up 1% to $3.87.

Why is the South32 share price pushing higher?

Investors have been bidding the South32 share price today following the release of its first quarter update.

South32 had a reasonably robust quarter in respect to its production, with several areas of the business reporting quarter on quarter increases.

The highlight was arguably the company's metallurgical coal production, which came in at 1,575kt. This represents an 18% increase over its fourth quarter performance, though remains down year on year.

Another positive was manganese ore production which climbed to 1,565kwmt during the quarter. This is an increase of 7% both quarter on quarter and year on year. Management advised that this reflects a quarterly record at South Africa Manganese and a strong start to the year at Australia Manganese.

South32's alumina production fell 10% quarter on quarter. This was impacted by an incident at Brazil Alumina that damaged one of the bauxite unloaders at the refinery in July. Positively, the company restored production to normalised rates in October.

Finally, the company reported aluminium production of 248kt, which was flat year on year but up 1% over the fourth quarter.

Positively, with all its operations continuing to deliver to plan, the company has maintained its FY 2022 production guidance.

At the end of the period, the company's net cash balance stood at US$660 million. This was up US$254 million from three months earlier.

Management commentary

South32's CEO, Graham Kerr, was pleased with the quarter.

He said: "Our operations continue to perform well, achieving record production at South Africa Manganese and maintaining production above nameplate capacity at Worsley Alumina. Production at Mozal Aluminium was higher, with the smelter benefitting from our investment in the AP3XLE energy efficiency technology."

"We continue to actively reshape our portfolio for a low carbon future, and last week entered into binding conditional agreements to acquire a 45 per cent interest in Sierra Gorda, a long life, open pit copper mine in Chile. We have also recently exercised our pre-emptive rights to acquire an additional interest in Mozal Aluminium."

"These initiatives, and our ongoing work with Alcoa in Brazil to investigate the Alumar smelter's potential restart using renewable power, will see us increase our leverage to the metals critical to the green energy transition," he concluded.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »