South32 Regulatory News (S32)

·

Group copper equivalent production1 increased by 12% in H1 FY23, as our recent investments in copperand low-carbon aluminium capacity2 delivered strong growth

·

H1 FY23 Operating unit costs expected to be in-line or below FY23 guidance at the majority of our operations

·

We are well positioned to capture the benefit of improved market conditions, with further expected production growth in H2 FY23 and our ongoing focus on cost management to mitigate inflationary pressures

·

Worsley Alumina and Brazil Alumina operated above nameplate capacity in the December 2022 quarter, delivering an 8% increase in quarterly alumina volumes

·

Aluminium production increased by 15% in the December 2022 half year, with a 50% uplift in low-carbon aluminium, following our acquisition of an additional shareholding in Mozal Aluminium and restart of the Brazil Aluminium smelter

·

Sierra Gorda realised sequentially higher copper grades, delivering 45kt of payable copper equivalent production3 in the December 2022 half year

·

Cerro Matoso commissioned the Ore Sorting and Mechanical Ore Concentration project in the December 2022 quarter, underpinning a 15 year extension to the mining contract, and supporting higher expected nickel production in H2 FY23

·

Australia Manganese achieved record half year production, supporting a 7% increase in total manganese production

·

Illawarra Metallurgical Coal delivered a 17% increase in quarterly metallurgical coal production, with improved volumes and labour productivity as we finalised a new industrial agreement at Appin

·

FY23 production guidance at Cannington revised lower by 11% due to lower mill throughput and labour availability impacting mining rates, and at Brazil Aluminium by 25kt (or 25%) due to a slower ramp-up to nameplate capacity

·

Work completed on Hermosa's Clark selection phase pre-feasibility study confirmed the opportunity to produce high-purity manganese sulphate monohydrate for the growing North American electric vehicle supply chain 

Production summary

South32 share

1H22

1H23

HoH

2Q22

1Q23

2Q23

QoQ

Alumina production (kt)

2,610

2,613

0%

1,332

1,257

1,356

8%

Aluminium production (kt)

494

568

15%

246

279

289

4%

Payable copper production (kt)

- -

37.9

N/A

- -

19.0

18.9

(1%)

Payable silver production (koz)

6,710

5,812

(13%)

3,217

2,748

3,064

11%

Payable lead production (kt)

60.2

52.4

(13%)

28.3

24.6

27.8

13%

Payable zinc production (kt)

32.7

30.4

(7%)

17.3

14.0

16.4

17%

Payable nickel production (kt)

20.3

20.4

0%

10.7

9.6

10.8

13%

Metallurgical coal production (kt)

2,767

2,753

(1%)

1,192

1,270

1,483

17%

Manganese ore production (kwmt)

2,757

2,937

7%

1,252

1,460

1,477

1%

Unless otherwise noted: percentage variance relates to performance during the half year ended December 2022 compared with the half year ended December 2021 (HoH), or the December 2022 quarter compared with the September 2022 quarter (QoQ); production and sales volumes are reported on an attributable basis.

·

On 7 November 2022, two of our colleagues, Mr Cristovão Alberto Tonela and Mr Alfredo Francisco Domingos João, were fatally injured in an incident at Mozal Aluminium. Our deepest sympathies are with the families and colleagues of the deceased to whom we have provided our support and counselling. The incident occurred during maintenance work on a raising girder. Production operations were temporarily suspended while an investigation was completed. Key learnings from the incident are being shared across our organisation and with industry. As an immediate step, additional controls were put in place for all raising girders at Mozal Aluminium and Hillside Aluminium.

·

A non-binding advisory resolution in relation to our Climate Change Action Plan (CCAP) was passed by shareholders at our Annual General Meeting on 27 October 2022, with 89.6% of the votes received in favour of the resolution. Our CCAP included a new goal4 of net zero Scope 3 greenhouse gas emissions by 2050 and a commitment not to develop or invest in greenfield metallurgical coal projects. 

·

Consistent with our focus on securing low-carbon energy, Sierra Gorda's electricity supply will transition to cost efficient, fully renewable sources from January 2023 under an agreement to December 2039. Electricity supplied to the operation will be from solar, wind and hydroelectric power sources, sustainably reducing Sierra Gorda's greenhouse gas emissions and energy costs.

·

During the December 2022 quarter, we satisfied the conditions to extend the mining contract at Cerro Matoso by 15 years from 2029 to 2044. As part of this extension, we received third-party certification of the expanded processing capacity5 delivered by the Ore Sorting and Mechanical Ore Concentration (OSMOC) project and paid US$43M to the National Mining Agency in the December 2022 quarter.

·

We made a final investment decision to install additional ventilation capacity at Illawarra Metallurgical Coal's Appin mine to enable mining in the current Area 7 until at least 20396. This ~US$260M investment is expected to be completed by H1 FY26, with our guidance for FY23 and FY24 safe and reliable capital expenditure already reflecting this activity.

·

We expect to record a build in working capital of approximately US$100M in the December 2022 half year, primarily related to an increase in inventories. This impact is most acute in our aluminium value chain in Southern Africa due to ongoing shipping delays.

·

During the December 2022 quarter, we returned a record US$784M in fully-franked ordinary and special dividends in respect of the June 2022 half year.

·

We also returned US$143M via our on-market share buy-back during the December 2022 half year, purchasing a further 56M shares at an average price of A$3.86. To 31 December 2022, our US$2.3B capital management program was 95% complete with US$108M remaining to be returned ahead of its extension or expiry on 1 September 20237.

·

We received net distributions8 of US$60M (South32 share) from our manganese equity accounted investments (EAI) in the December 2022 half year, following the payment of income tax (US$94M, 100% basis), and royalties at Australia Manganese (US$82M, 100% basis). We did not receive a distribution from our Sierra Gorda EAI in the December 2022 half year.

·

We made tax payments of US$347M in the December 2022 half year, which included US$111M in relation to our acquisition of Sierra Gorda. Of this amount, ~€92M (~US$94M at the payment date) relates to pre-closing tax liabilities which we intend to seek to recover from the vendors.

·

Our Group Underlying effective tax rate (ETR) for the December 2022 half year is expected to be approximately 35%, reflecting the corporate tax rates of the jurisdictions in which we operate9 and our geographical earnings mix, including our manganese and Sierra Gorda EAIs which are proportionally consolidated in our Underlying results. Separately, the Underlying ETR of our manganese business is expected to be in a range of approximately 55 to 60%, including the royalty related tax for Australia Manganese10 and the derecognition of certain deferred tax assets.

·

We extended our undrawn sustainability-linked revolving credit facility during the December 2022 quarter, retaining available capacity of US$1.4B to December 2026 and US$1.2B to December 2027.

·

Reflecting our strong balance sheet and continued disciplined approach to capital allocation, our current BBB+/Baa1 credit ratings were re-affirmed by S&P Global Ratings and Moody's, respectively.

·

We invested US$96M at Hermosa in the December 2022 half year as we continued critical path dewatering activity and study work for the Taylor zinc-lead-silver deposit and the Clark battery-grade manganese-zinc-silver deposit.

·

We completed drilling of the first two dewatering wells during the December 2022 half year, with a total of six dewatering wells expected to be completed during FY23. The second water treatment plant remains on-track to be commissioned in the June 2023 quarter.

·

We progressed the Taylor feasibility study which remains on-track to support a planned final investment decision in mid CY23.

·

We completed work on the selection phase of the Clark pre-feasibility study during the December 2022 quarter. While this study remains subject to independent review, work to date has confirmed the opportunity to produce high-purity manganese sulphate monohydrate for the growing North American electric vehicle supply chain. 

·

In parallel, we progressed metallurgical test work and continued our drilling program at Clark to collect bulk samples that will support initial pilot plant production from mid CY23.

·

We directed US$6M to capitalised exploration in the December 2022 half year, as we continued our planned exploration programs including at the copper-lead-zinc-silver Peake prospect11. We expect to commence exploration drilling at the Flux prospect12 during CY23, following the receipt of approvals.

·

At our Ambler Metals joint venture, the CY22 summer exploration program was completed and the joint venture progressed work on the pre-feasibility study for the Arctic deposit. Our share of capitalised exploration was US$8M in the December 2022 half year.

·

Activity in CY23 is expected to focus on consolidating our geological knowledge and advancing engineering studies, while we monitor progress on approvals for the Ambler Access Project.

·

We invested US$19M during the December 2022 half year in our greenfield exploration opportunities, with multiple programs targeting base metals underway in Australia, USA, Canada, Argentina, Peru and Ireland.

·

We invested US$30M (US$20M capitalised) in exploration programs at our existing operations and development options in the December 2022 half year, including US$6M at the Hermosa project (noted above, all capitalised), US$8M at Ambler Metals (noted above, all capitalised), US$2M for our manganese EAI (US$1M capitalised) and US$3M for our Sierra Gorda EAI (US$1M capitalised).

Worsley Alumina

Alumina production (kt)

3,991

1,922

4,000

Brazil Alumina (non-operated)

Alumina production (kt)

1,297

691

1,395

Brazil Aluminium (non-operated)

Aluminium production (kt)

0.3

23.7

↓ 75

Guidance reduced by 25kt (from 100kt) due to a slower than expected ramp-up to nameplate capacity

Hillside Aluminium13

Aluminium production (kt)

714

362

720

Mozal Aluminium13,14

Aluminium production (kt)

278

182

370

Sierra Gorda (non-operated)

Payable copper equivalent production3 (kt)

30.6

44.9

89.0

Payable copper production (kt)

25.3

37.9

71.8

Payable molybdenum production (kt)

0.4

0.4

1.5

Payable gold production (koz)

9.6

15.3

29.9

Payable silver production (koz)

253

338

582

Cannington

Payable zinc equivalent production15 (kt)

224.2

98.8

↓ 209.4

Guidance reduced by 11% (from 236.1kt payable zinc equivalent) with lowerH1 FY23 mill throughput and labour availability impacting mining rates

Payable silver production (koz)

12,946

5,474

↓ 12,000

Payable lead production (kt)

120.6

52.4

↓ 108.5

Payable zinc production (kt)

64.5

30.4

↓ 63.5

Cerro Matoso

Payable nickel production (kt)

41.7

20.4

43.5

OSMOC project expected to support higher volumes inH2 FY23

Illawarra Metallurgical Coal

Total coal production (kt)

6,509

3,331

 7,000

Improved labour productivity expectedin H2 FY23

Metallurgical coal production (kt)

5,712

2,753

6,000

Energy coal production (kt)

797

578

1,000

Australia Manganese

Manganese ore production (kwmt)

3,363

1,844

3,400

Production tracking ahead of guidance, prior to the wet season

South Africa Manganese

Manganese ore production (kwmt)

2,069

1,093

2,000

Subject to demand and our continued use of higher cost trucking

Realised prices16

1H22

2H22

1H23

1H23vs1H22

1H23vs2H22

Worsley Alumina

Alumina (US$/t)

389

428

354

(9%)

(17%)

Brazil Alumina (non-operated)(a)

Alumina (US$/t)

387

419

364

(6%)

(13%)

Brazil Aluminium (non-operated)(a)

Aluminium (US$/t)

-

-

2,423

N/A

N/A

Hillside Aluminium

Aluminium (US$/t)

2,952

3,347

2,555

(13%)

(24%)

Mozal Aluminium

Aluminium (US$/t)

3,041

3,591

2,723

(10%)

(24%)

Sierra Gorda (non-operated)17(a)(b)

Payable copper (US$/lb)

-

3.50

3.41

N/A

(3%)

Payable molybdenum (US$/lb)

-

18.48

20.78

N/A

12%

Payable gold (US$/oz)

-

1,934

1,688

N/A

(13%)

Payable silver (US$/oz)

-

23.5

17.4

N/A

(26%)

Cannington18

Payable silver (US$/oz)

21.0

21.0

20.1

(4%)

(4%)

Payable lead (US$/t)

2,180

1,902

2,008

(8%)

6%

Payable zinc (US$/t)

2,988

3,473

2,436

(18%)

(30%)

Cerro Matoso19

Payable nickel (US$/lb)

8.39

11.64

9.05

8%

(22%)

Illawarra Metallurgical Coal

Metallurgical coal (US$/t)

303

457

268

(12%)

(41%)

Energy coal (US$/t)

108

200

164

52%

(18%)

Australia Manganese20

Manganese ore (US$/dmtu, FOB)

4.59

6.05

4.57

0%

(24%)

South Africa Manganese20

Manganese ore (US$/dmtu, FOB)

3.47

4.39

3.57

3%

(19%)

a.

While Brazil Alumina and Brazil Aluminium are non-operated, South32 owns the marketing rights for our share of production. While Sierra Gorda is also non-operated, the Joint Venture is responsible for marketing our share of production.

b.

Published 2H22 realised sales prices and Operating unit costs reflect the period 1 March 2022 to 30 June 2022. Whereas production and sales numbers, and all Income Statement items reflect the period from first ownership (22 February 2022).

Worsley Alumina

(US$/t)

296

Expected to be ~2.5% below current FY23 guidance, with a weaker Australian dollar and lower caustic soda costs to more than offset higher energy prices

Brazil Alumina (non-operated)

Not

provided

Expected to be ~17.5% above H2 FY22 Operating unit costs (US$312/t), as raw material input and energy prices remain elevated, and we incurred higher contractor costs

Brazil Aluminium (non-operated)

Not

provided

Gross operating costs of ~US$120M expected as we invest to support the smelter's ramp-up to nameplate capacity

Hillside Aluminium

Not

provided

The cost profile of our Southern African aluminium smelters is heavily influenced by the South African rand, and the price of raw materials and energy.

We expect to report a modest reduction in Operating unit costs inH1 FY23 relative to H2 FY22, with the benefit of a weaker South African rand, while smelter raw material prices (pitch, coke and aluminiumtri-fluoride) remained elevated.

H1 FY23 Operating unit costs for Hillside Aluminium are expected to be ~2.5% lower (H2 FY22: US$2,318/t) and at Mozal Aluminium ~7.5% lower (H2 FY22: $2,429/t).

Mozal Aluminium

Sierra Gorda (non-operated)

(US$/t)(d)

14.8

Expect to be ~12.5% above current FY23 guidance, with higher coal price-linked energy costs and lower ore processed

Cannington

(US$/t)(d)

129

Expect to be ~5% above current FY23 guidance, with a weaker Australian dollar and lower price-linked royalties, to be more than offset by lower ore processed

Cerro Matoso

(US$/lb)

4.97

Expected to be in-line with current FY23 guidance, with a weaker Colombian peso and lower price-linked royalties, expected to offset lower volumes

Illawarra Metallurgical Coal

(US$/t)

116

Expected to be ~7.5% above current FY23 guidance, with a weaker Australian dollar and lower price-linked royalties, to be more than offset by lower volumes

Australia Manganese (FOB)

(US$/dmtu)

2.08

Expected to be ~15% below current FY23 guidance, benefitting from higher volumes, together with a weaker Australian dollar and lowerprice-linked royalties

South Africa Manganese (FOB)

(US$/dmtu)

2.66

Expected to be in-line with current guidance, with a weaker South African rand partially offset by the use of higher cost trucking

a.

Operating unit cost is Revenue less Underlying EBITDA, excluding third party sales, divided by sales volumes. Operating cost is Revenue less Underlying EBITDA excluding third party sales.

b.

FY23e Operating unit cost guidance includes royalties (where appropriate) and commodity price and foreign exchange rate forward curves or our internal expectations (refer to footnote 21).

c.

The denotation (e) refers to an estimate or forecast year. All guidance is subject to further potential impacts from COVID-19.

d.

US dollar per tonne of ore processed. Periodic movements in finished product inventory may impact Operating unit costs.

South32 share

1H22

1H23

HoH

2Q22

1Q23

2Q23

2Q23vs2Q22

2Q23vs1Q23

Alumina production (kt)

1,979

1,922

(3%)

973

920

1,002

3%

9%

Alumina sales (kt) 

1,946

1,861

(4%)

1,022

885

976

(5%)

10%

South32 share

1H22

1H23

HoH

2Q22

1Q23

2Q23

2Q23vs2Q22

2Q23vs1Q23

Alumina production (kt)

631

691

10%

359

337

354

(1%)

5%

Alumina sales (kt) 

626

678

8%

379

313

365

(4%)

17%

South32 share

1H22

1H23

HoH

2Q22

1Q23

2Q23

2Q23vs2Q22

2Q23vs1Q23

Aluminium production (kt)

-

23.7

N/A

-

8.3

15.4

N/A

86%

Aluminium sales (kt) 

-

19.4

N/A

-

3.3

16.1

N/A

388%

South32 share

1H22

1H23

HoH

2Q22

1Q23

2Q23

2Q23vs2Q22

2Q23vs1Q23

Aluminium production (kt)

358

362

1%

178

179

183

3%

2%

Aluminium sales (kt) 

336

337

0%

176

162

175

(1%)

8%

South32 share

1H22

1H23

HoH

2Q22

1Q23

2Q23

2Q23vs2Q22

2Q23vs1Q23

Aluminium production (kt)

136

182

34%

68

92

90

32%

(2%)

Aluminium sales (kt) 

122

177

45%

67

87

90

34%

3%

South32 share

1H22

1H23

HoH

2Q22

1Q23

2Q23

2Q23vs2Q22

2Q23vs1Q23

Payable copper equivalent production3 (kt)

-

44.9

N/A

-

22.6

22.3

N/A

(1%)

Payable copper production (kt)

-

37.9

N/A

-

19.0

18.9

N/A

(1%)

Payable copper sales (kt)

-

38.4

N/A

-

19.2

19.2

N/A

0%

South32 share

1H22

1H23

HoH

2Q22

1Q23

2Q23

2Q23vs2Q22

2Q23vs1Q23

Payable zinc equivalent production15 (kt)

114.0

98.8

(13%)

55.9

46.1

52.7

(6%)

14%

Payable silver production (koz)

6,710

5,474

(18%)

3,217

2,568

2,906

(10%)

13%

Payable silver sales (koz)

6,718

5,083

(24%)

4,000

1,704

3,379

(16%)

98%

Payable lead production (kt)

60.2

52.4

(13%)

28.3

24.6

27.8

(2%)

13%

Payable lead sales (kt)

63.3

51.3

(19%)

38.0

18.7

32.6

(14%)

74%

Payable zinc production (kt)

32.7

30.4

(7%)

17.3

14.0

16.4

(5%)

17%

Payable zinc sales (kt)

32.8

27.5

(16%)

18.5

14.9

12.6

(32%)

(15%)

South32 share

1H22

1H23

HoH

2Q22

1Q23

2Q23

2Q23vs2Q22

2Q23vs1Q23

Payable nickel production (kt)

20.3

20.4

0%

10.7

9.6

10.8

1%

13%

Payable nickel sales (kt)

20.1

19.8

(1%)

9.7

9.0

10.8

11%

20%

South32 share

1H22

1H23

HoH

2Q22

1Q23

2Q23

2Q23vs2Q22

2Q23vs1Q23

Total coal production (kt)

3,145

3,331

6%

1,257

1,595

1,736

38%

9%

Total coal sales23 (kt)

3,255

3,185

(2%)

1,547

1,390

1,795

16%

29%

Metallurgical coal production (kt)

2,767

2,753

(1%)

1,192

1,270

1,483

24%

17%

Metallurgical coal sales (kt)

2,877

2,678

(7%)

1,387

1,193

1,485

7%

24%

Energy coal production (kt)

378

578

53%

65

325

253

289%

(22%)

Energy coal sales (kt)

378

507

34%

160

197

310

94%

57%

South32 share

1H22

1H23

HoH

2Q22

1Q23

2Q23

2Q23vs2Q22

2Q23vs1Q23

Manganese ore production (kwmt)

1,704

1,844

8%

807

898

946

17%

5%

Manganese ore sales (kwmt)

1,737

1,652

(5%)

831

779

873

5%

12%

South32 share

1H22

1H23

HoH

2Q22

1Q23

2Q23

2Q23vs2Q22

2Q23vs1Q23

Manganese ore production (kwmt)

1,053

1,093

4%

445

562

531

19%

(6%)

Manganese ore sales (kwmt)

1,094

1,032

(6%)

579

473

559

(3%)

18%

1.

Group payable copper equivalent production calculated by applying H1 FY23 production volumes and FY22 realised prices for all operations(except for Brazil Aluminium which is based on FY22 average index prices for aluminium). The 12% increase in H1 FY23 Group payable copper equivalent production is calculated relative to H1 FY22 production volumes and FY22 realised prices for all operations (except for Brazil Aluminium which is based on FY22 average index prices for aluminium).

2.

Refers to aluminium produced using renewable power.

3.

Payable copper equivalent production (kt) was calculated by aggregating revenues from payable copper, molybdenum, gold and silver, and dividing the total Revenue by the price of copper. FY22 realised prices for copper (US$3.50/lb), molybdenum (US$18.48/lb), gold (US$1,934/oz) and silver (US$23.5/oz) have been used for FY22, H1 FY23 and FY23e.

4.

Goal is defined as an ambition to seek an outcome for which there is no current pathway(s), but for which efforts will be pursued towards addressing that challenge, subject to certain assumptions or conditions. Target is defined as an intended outcome in relation to which we have identified one or more pathways for delivery of that outcome, subject to certain assumptions or conditions.

5.

The information in this report that relates to the production target is based on Proved (75%) and Probable (25%) Ore Reserves for Cerro Matoso. Mineral Resources and Ore Reserve estimates for Cerro Matoso was declared as part of South32's Annual Resource and Reserve declaration in the Annual Report 2022 (www.south32.net) issued on 9 September 2022 and prepared by I Espitia (MAusIMM) and N Monterroza (MAusIMM) in accordance with the requirements of the JORC Code. South32 confirms that it is not aware of any new information or data that materially affects the information included in the original announcement. All material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. South32 confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement. Payable nickel is calculated using long-term consensus metal prices and relative metallurgical recoveries.

6.

Refer to market release "Dendrobium Next Domain Update" dated 23 August 2022 (market release). The information in the market release that refers to the Production Target and forecast financial information for the Appin mine at Illawarra Metallurgical Coal is based on Proved (14%) and Probable (86%) Coal Reserves from Bulli. The Coal Reserves estimates underpinning the Production Target have been prepared by M Rose (Competent Person) and reported in accordance with the JORC Code. The Coal Reserves estimates are available to view in South32's FY22 Annual Report (http://www.south32.net) published on 9 September 2022. The stated Production Target is based on South32's current expectations of future results or events and should not be solely relied upon by investors when making investment decisions. Further evaluation work and appropriate studies are required to establish sufficient confidence that this target will be met.

7.

Since inception, US$1.6B has been allocated to the on-market share buy-back (752M shares at an average price of A$3.00 per share)and US$525M returned in the form of special dividends.

8.

Net distributions from our material equity accounted investments (manganese and Sierra Gorda) includes net debt movements and dividends, which are unaudited and should not be considered as an indication of or alternative to an IFRS measure of profitability, financial performance or liquidity.

9.

The corporate tax rates of the geographies where the Group operates include: Australia 30%, South Africa 27%, Colombia 35%, Mozambique 0%,Brazil 34% and Chile 27%. The South African corporate tax rate reduced from 28% to 27% from 1 July 2022. The Mozambique operations are subject to a royalty on revenues instead of income tax. Sierra Gorda is subject to a royalty related tax based on the amount of copper sold and the mining operating margin, the rate is between 5% and 14% for annual sales over 50kt of refined copper. This royalty is included in tax expense.

10.

Australia Manganese is subject to a royalty related tax equal to 20% of adjusted EBIT which is included in tax expense.

11.

Peake Prospect Exploration Target: The information in this announcement that relates to the Exploration Target for Peake Prospect is extracted from "Hermosa Project Update" published on 17 January 2022 and is available to view on www.south32.net. The information was prepared byD Bertuch (Competent Person) in accordance with the requirements of the JORC Code. South32 confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement. South32 confirms that the form and context in which the Competent Person's findings are presented have not been materially changed from the original market announcement.

12.

Flux Exploration Target: The information in this announcement that relates to the Exploration Target for Flux is extracted from "South32 Strategy and Business Update" published on 18 May 2021 and is available to view on www.south32.net. The information was prepared by D Bertuch (Competent Person) in accordance with the requirements of the JORC Code. South32 confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement. South32 confirms that the form and context in which the Competent Person's findings are presented have not been materially changed from the original market announcement.

13.

Production guidance for Hillside Aluminium and Mozal Aluminium does not assume any load-shedding impact on production.

14.

Refer to market release "South32 completes acquisition of additional shareholding in Mozal Aluminium" dated 31 May 2022. Historical production and sales figures have not been restated for our increased ownership (presented on a 47.1% basis to 31 May 2022).

15.

Payable zinc equivalent production (kt) was calculated by aggregating revenues from payable silver, lead and zinc, and dividing the total Revenue by the price of zinc. FY22 realised prices for zinc (US$3,248/t), lead (US$2,046/t) and silver (US$21.0/oz) have been used for FY22, H1 FY23 and FY23e.

16.

Realised prices are unaudited. Volumes and prices do not include any third party trading that may be undertaken independently of equity production. Realised sales price is calculated as sales Revenue divided by sales volume unless otherwise stated.

17.

Realised prices for Sierra Gorda are net of treatment and refining charges.

18.

Realised prices for Cannington are net of treatment and refining charges.

19.

Realised nickel sales prices are inclusive of by-products.

20.

Realised ore prices are calculated as external sales Revenue less freight and marketing costs, divided by external sales volume.

21.

FY23 Operating unit cost guidance includes royalties (where appropriate) and the influence of exchange rates, and includes various assumptions for FY23, including: an alumina price of US$364/t; an average blended coal price of US$265/t for Illawarra Metallurgical Coal; a manganese ore price of US$6.40/dmtu for 44% manganese product; a nickel price of US$9.94/lb; a silver price of US$22.11/troy oz; a lead price of US$2,059/t (gross of treatment and refining charges); a zinc price of US$3,480/t (gross of treatment and refining charges); a copper price of US$4.07/lb (gross of treatment and refining charges); a molybdenum price of US$16.95/lb (gross of treatment and refining charges); a gold price of US$1,860/troy oz; an AUD:USD exchange rate of 0.69; a USD:ZAR exchange rate of 16.62; a USD:COP exchange rate of 3,851; USD:CLP exchange rate of 814; and a reference price for caustic soda; which reflect forward markets as at June 2022 or our internal expectations.

22.

Cerro Matoso is subject to a royalty related tax equal to 13.5% of mine gate value which is included in operating cost.

23.

Illawarra Metallurgical Coal sales are adjusted for moisture and will not reconcile directly to Illawarra Metallurgical Coal production.

Worsley Alumina (86% share)

Alumina hydrate production (kt)

1,994

1,955

997

972

1,014

957

998

Alumina production (kt)

1,979

1,922

973

982

1,030

920

1,002

Alumina sales (kt)

1,946

1,861

1,022

910

1,118

885

976

Brazil Alumina (36% share)

Alumina production (kt)

631

691

359

335

331

337

354

Alumina sales (kt)

626

678

379

306

367

313

365

Brazil Aluminium (40% share)

Aluminium production (kt)

-

23.7

-

-

0.3

8.3

15.4

Aluminium sales (kt)

-

19.4

-

-

-

3.3

16.1

Hillside Aluminium (100% share)

Aluminium production (kt)

358

362

178

177

179

179

183

Aluminium sales (kt)

336

337

176

179

198

162

175

Mozal Aluminium (63.7%14 share)

Aluminium production (kt)

136

182

68

66

76

92

90

Aluminium sales (kt)

122

177

67

66

88

87

90

Sierra Gorda (45% share)

Ore mined (Mt)

-

15.4

-

4.7

9.0

8.8

6.6

Ore processed (Mt)

-

10.7

-

2.3

5.2

5.4

5.3

Copper ore grade processed (%, Cu)

-

0.45

-

0.45

0.40

0.45

0.44

Payable copper equivalent production3 (kt)

-

44.9

-

10.3

20.3

22.6

22.3

Payable copper production (kt)

-

37.9

-

8.4

16.9

19.0

18.9

Payable copper sales (kt)

-

38.4

-

11.1

16.6

19.2

19.2

Payable molybdenum production (kt)

-

0.4

-

0.2

0.2

0.2

0.2

Payable molybdenum sales (kt)

-

0.8

-

0.1

0.5

0.3

0.5

Payable gold production (koz)

-

15.3

-

2.3

7.3

7.8

7.5

Payable gold sales (koz)

-

15.4

-

3.0

6.9

7.7

7.7

Payable silver production (koz)

-

338

-

85

168

180

158

Payable silver sales (koz)

-

345

-

111

171

179

166

Cannington (100%)

Ore mined (kwmt)

1,475

1,123

725

637

641

639

484

Ore processed (kdmt)

1,385

1,142

698

681

552

518

624

Silver ore grade processed (g/t, Ag)

177

175

169

188

177

179

171

Lead ore grade processed (%, Pb)

5.2

5.5

4.9

5.9

5.5

5.6

5.4

Zinc ore grade processed (%, Zn)

3.4

3.6

3.6

3.4

3.8

3.7

3.6

Payable zinc equivalent production15 (kt)

114.0

98.8

55.9

61.3

48.9

46.1

52.7

Payable silver production (koz)

6,710

5,474

3,217

3,568

2,668

2,568

2,906

Payable silver sales (koz)

6,718

5,083

4,000

2,818

3,362

1,704

3,379

Payable lead production (kt)

60.2

52.4

28.3

34.6

25.8

24.6

27.8

Payable lead sales (kt)

63.3

51.3

38.0

27.9

31.0

18.7

32.6

Payable zinc production (kt)

32.7

30.4

17.3

16.4

15.4

14.0

16.4

Payable zinc sales (kt)

32.8

27.5

18.5

17.3

16.1

14.9

12.6

Cerro Matoso (99.9% share)

Ore mined (kwmt)

2,416

2,752

1,358

1,310

1,141

1,332

1,420

Ore processed (kdmt)

1,335

1,392

715

690

678

666

726

Ore grade processed (%, Ni)

1.73

1.64

1.71

1.73

1.71

1.63

1.65

Payable nickel production (kt) 

20.3

20.4

10.7

10.6

10.8

9.6

10.8

Payable nickel sales (kt)

20.1

19.8

9.7

9.8

11.9

9.0

10.8

Illawarra Metallurgical Coal (100%)

Total coal production (kt)

3,145

3,331

1,257

1,781

1,583

1,595

1,736

Total coal sales23 (kt)

3,255

3,185

1,547

1,465

1,886

1,390

1,795

Metallurgical coal production (kt)

2,767

2,753

1,192

1,565

1,380

1,270

1,483

Metallurgical coal sales (kt)

2,877

2,678

1,387

1,358

1,588

1,193

1,485

Energy coal production (kt)

378

578

65

216

203

325

253

Energy coal sales (kt)

378

507

160

107

298

197

310

Australia Manganese (60% share)

Manganese ore production (kwmt)

1,704

1,844

807

815

844

898

946

Manganese ore sales (kwmt)

1,737

1,652

831

775

860

779

873

Ore grade sold (%, Mn)

44.2

44.2

44.2

44.1

44.2

44.3

44.1

South Africa Manganese (54.6% share)

Manganese ore production (kwmt)

1,053

1,093

445

391

625

562

531

Manganese ore sales (kwmt)

1,094

1,032

579

495

581

473

559

Ore grade sold (%, Mn)

39.5

39.2

38.7

40.5

39.4

38.5

39.8

INVESTOR RELATIONS

Ben BakerM +61 403 763 086

E Ben.Baker@south32.net

MEDIA RELATIONS

Jamie MacdonaldM +61 408 925 140

E Jamie.Macdonald@south32.net

Miles GodfreyM +61 415 325 906

E Miles.Godrey@south32.net