South32 reports a seven-fold rise in profit for H12022

Last year South32 witnessed a rise in annual revenue, amounting to US$2.67 billion or AU$3.87 billion in total, owing to systematically augmenting prices of raw materials like metallurgical coal and aluminium.

The diversified miner made the highest profit since its inception in 2015, owing to a collection of the residual assets discarded by BHP. South32 made US$1.03 billion from aluminium and US$1.54 million from industrial coal used for steel production. Higher realised prices are directly proportional to underlying earnings, which had a US$3.67 billion or AU$5.3 billion spike.

Graham Kerr, the CEO of South32, explained that shareholders would be able to retrieve US$648 million or AU$936 million in final dividends for the second half of the year, along with special dividends worth US$139 or AU$200 million. The fully franked payouts cost 17 US cents per share.

“We have repositioned our portfolio toward metals critical for a low-carbon future,” Graham Kerr commented on August 25, Thursday.

The coal-induced huge profit scale was revealed just two days after South32 accomplished a US$700 million upgradation of its Dendrobium coal mine in NSW.

Graham Kerr also notified: “We added copper to our portfolio through the acquisition of a 45 per cent interest in Sierra Gorda and doubled our low-carbon aluminium capacity with an additional shareholding in the hydro-powered Mozal Aluminium smelter and the restart of our 100 per cent renewable powered Brazil Aluminium smelter.”

Kerr stated that he was optimistic about the industrial price hike and had prior ploys of diluting its effects with 14 per cent amplified production this financial year. He also was very definite about cost cuts across the mining and production units.

South32 primarily yields industrial products, such as metallurgical coal, alumina, aluminium, nickel and manganese. The shares of South32 have raised by 4.3 per cent or 18c to US$4.41 each share, during the early morning trade hours.

South32 is active in all stages of aluminium production, from bauxite mining to smelting aluminium in large smelters with the use of an enormous amount of energy. Its operations are primarily based in South Africa, South America and Australia.

The mined bauxite is transformed into alumina at its Worsley Alumina and Brazil Alumina sites, the former being one of the world’s largest alumina refineries.

South32 then morphs the alumina into aluminium with the common smelting process at their Mozal Aluminium and Hillside aluminium operations, where Hillside can be acknowledged as the largest aluminium smelter in the southern hemisphere.