SOUTH32, a globally diversified mining and metals company, increased manganese production in South Africa in the September quarter as productivity improved at its Wessels mine, but sales declined sharply after the miner reduced higher-cost trucking amid softer market conditions. The figures highlight the trade-off facing producers as they balance output growth against the cost of getting ore to customers.

Saleable production from South32’s South African manganese operations rose 11% quarter on quarter to 588,000 tons from 528,000 tons in the June quarter. Output was 7% higher than a year earlier, supported by improved underground productivity at Wessels, one of the group’s key manganese assets.

Why sales fell despite growth

Manganese sales dropped 22% from the previous quarter to 460,000 tons and fell 16% year on year. South32 said it reduced trucked volumes in response to market conditions, while one shipment was deferred to the December quarter, further weighing on sales during the period.

The decision comes as manganese demand remains closely tied to steel production, particularly in China. For South African miners, constrained rail capacity can force greater reliance on road transport, making diesel prices and trucking charges critical considerations when deciding how much ore to move.

South32 said in August that higher trucking and diesel costs had hurt earnings from its South African manganese operations despite increased sales volumes. The company maintained its production forecast of 2 million tons for the 2027 financial year, saying it would continue to monitor market conditions and optimize the use of more expensive trucking.

Australian mines drive recovery

South32’s overall manganese production rose 14% in the September quarter, with its Australian operations providing the larger contribution. Saleable output from Australia Manganese increased 15% quarter on quarter to 902,000 tons as operating conditions improved following heavy rainfall in the previous quarter. Production was 6% higher year on year.

The miner retained its Australian production forecast of 2.65 million to 2.9 million tons, subject to wet-season conditions, and continued work on approvals for additional water-management infrastructure. Chief Executive Officer Matt Daley said the group had made a positive start to the financial year, maintaining production estimates across its operations and advancing key development milestones at its copper and zinc projects.

Copper cash supports investment

South32’s net cash increased by $14 million during the quarter to $297 million, supported by a $153 million distribution from its Sierra Gorda copper investment in Chile. Payable copper-equivalent production at Sierra Gorda rose 11% quarter on quarter to 22,400 tons as higher planned copper grades offset temporary disruption caused by wet weather.

The company also invested $197 million in its Hermosa zinc-lead-silver project in Arizona. Construction continued underground and at surface, with the main and ventilation shafts expected to reach the primary production level in the December quarter. All flotation cells and major electrical transformers had been installed.

Headquartered in Perth, Australia, South32 produces aluminum, copper, silver, zinc and manganese across Australia, Southern Africa and the Americas. The company is listed on the Johannesburg Stock Exchange and the Australian Securities Exchange, with its manganese operations spanning South Africa and Australia, including the GEMCO business.