The South32 Ltd (ASX: S32) share price is having a poor start to the week.
In afternoon trade, the mining giant's shares are down almost 2.5% to $3.29.
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Why is the South32 share price falling?
Today's weakness appears to have been driven by a combination of weakness in the mining sector and the release of the company's first-quarter update.
In respect to the latter, South32 reported a sharp decline in metallurgical coal production during the quarter. It came in at 1,043kt, which is down 31% from the previous quarter. This was due to an extended planned longwall move at the Dendrobium mine.
Also posting declines in production were its Sierra Gorda copper operation, the Cannington zinc operation, and the Cerro Matoso nickel operation.
This took the shine off strong performances from its manganese operations, which delivered a 4% increase in production thanks to a record performance at South Africa Manganese and a strong start to the year at Australia Manganese.
Elsewhere, Alumina production increased by 3% and low-carbon aluminium production from Brazil Aluminium and Mozal Aluminium increased by 2%.
Guidance remains unchanged
While the above may look a bit mixed on paper, it was in line with management's expectations. As a result, the company's "FY24 production guidance remains unchanged across all operations."
South32 CEO, Graham Kerr, commented:
We have maintained annual production guidance for all of our operations with a strong start to the year at our manganese operations, a 34 per cent increase in production at Brazil Alumina and continued growth in low-carbon aluminium volumes.
Kerr also revealed how the miner plans to offset macroeconomic headwinds. He adds:
With macroeconomic conditions creating headwinds for many of our commodities, we remain focused on driving operating performance and cost efficiencies. 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.
The South32 share price is down 10% over the last 12 months.
