South32 has withdrawn the 2020 guidance for its South African and Colombian operations due to uncertainty over the impact of the COVID-19-related lockdowns imposed by both nations on the miner’s production volumes.
The Australian company indicated its export coal and manganese operations in South Africa were put on maintenance and care following the government’s lockdown announcement, though its Hillside aluminium smelting operations and domestic coal production remained operational as they are considered essential for power generation.
The company has also withdrawn its guidance for its Cerro Matoso operations in Colombia, which were ramped down with government approval after the South American country announced a nationwide lockdown to contain the COVID-19 spread. South32 also plans to reschedule its planned furnace refurbishment at Cerro Matoso’s smelter that was originally scheduled for the June 2020 quarter.
South32 has not experienced reduction in production at any other facilities yet, but continues to monitor the situation for any changes.
Graham Kerr, chief executive officer, South32, said said the company was taking measures to safeguard its financial health and balance sheet. The miner had reported net cash of $277mn at the end of 2019 and it plans to reduce expenditure by decreasing sustaining capital expenditure to around $150mn and exploration activity expenditure to close to $10mn.