South32 to recognise $554 mln charge against Worsley Alumina in FY24
Updates with details on Worsley Alumina ops, production results throughout
July 22 (Reuters) -South32 S32.AX will recognise an impairment charge of $554 million for its Worsley Alumina operations, after saying on Monday a regulator'srecommendations for the project might create operating challenges, whileits fourth-quarter manganese ore production slumped.
The Australian diversified miner's Worsley Alumina operations began an environmental approval process with the Western Australia Environmental Protection Authority (WA EPA) in 2019 to access bauxite to sustain production.
The WA EPA, a statutory authority, in early July published its recommendation that Worsley Alumina's proposal for mine development project may be implemented but had cited certain conditions.
"If imposed in their current form, several conditions recommended by the WA EPA create significant operating challenges for Worsley Alumina and impact its long-term viability," South32 said.
South32 added that it will recognise a pre-tax impairment expense of $264 million for its Cerro Matoso project in Colombia in its FY24 financial results.
South32's fourth-quarter manganese ore production slumped by over 60%, hurt by the temporary suspension of operations at its Groote Eylandt Mining Co (GEMCO) unit in the Gulf of Carpentaria.
The GEMCO project has been suspended since mid-March when a category two tropical cyclone, Megan, wreaked havoc near the region in northern Australia, significantly damaging South32's critical infrastructure at the site.
As a result, the diversified miner's manganese output for the quarter ended June 30 fell to 534 thousand wet metric tons (kwmt) from 1,455 kwmt a year earlier. That compares with a Macquarie estimate of about 508 kwmt.
"Australia Manganese saleable production decreased by 34% to 2,324 kwmt in FY24 as we temporarily suspended operations in March 2024 due to the impacts of Tropical Cyclone Megan", the miner said.
Reuters earlier in the day reported that a consortium led by Singapore's Golden Energy and Resources has secured $850 million to buy South32's Australian coking coal assets according to two sources, as private credit continues to fill a funding gap for the largely debanked sector.
Reporting by Roshan Thomas and Aaditya Govind Rao in Bengaluru; Editing by Chris Reese and Lincoln Feast.
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