South32 Ltd (ASX: S32) shares are rising on Monday.
At the time of writing, the mining giant's shares are up almost 1% to $3.54.
This follows the release of the company's second quarter and first half production update.
South32 shares rise on half year update
South32's operations performed relatively positively during the six months ended 31 December, except for Mozal Aluminium, which was impacted by civil unrest in Mozambique.
Nevertheless, Aluminium production still increased by 5% in the first half as Hillside Aluminium continued to test its maximum technical capacity, and low-carbon aluminium production from Brazil Aluminium and Mozal Aluminium increased by 12%.
Alumina production declined by 2% in the first half, but second quarter volumes improved by 14% as Worsley Alumina completed planned calciner maintenance and Brazil Alumina benefitted from improved plant availability. This bodes well for an improved performance in the second half.
One big positive was that Sierra Gorda payable copper equivalent production increased by 21% in the first half. Management notes that the operation benefitted from improved ore quality in the current phase of the mine plan.
Over at Cannington, it delivered a 56% increase in payable zinc equivalent production in the second quarter, as South32 completed additional dewatering in the prior quarter, and realised higher planned lead and silver grades.
Management commentary
South32's CEO, Graham Kerr, was pleased with the second quarter and first half, noting that it positions the company to deliver on its full year guidance. He said:
We continued our strong start to the year, maintaining production guidance for all of our operations except Mozal Aluminium, as we continue to mitigate the impact of civil unrest in Mozambique.
We achieved strong results in the December 2024 quarter, delivering higher base metals production and increasing alumina production by 14 per cent, capturing the benefit of strong alumina prices.
Kerr also spoke positively about the future and South32's exposure to the energy transition. He adds:
Having successfully divested Illawarra Metallurgical Coal in the September 2024 quarter, we have a strong balance sheet and platform for growth in minerals and metals critical to the world's energy transition.
At Hermosa, construction of the zinc-lead-silver Taylor deposit reached a significant milestone as we commenced shaft sinking in the quarter. […] We also continued to strengthen our growth pipeline, embedding additional copper exploration options in highly prospective regions during the period.
