South32's Cash Pile Swells in Third Quarter
April 26 2017 - 8:10PM
Dow Jones News
By David Winning
SYDNEY--South32 Ltd. (S32.AU) overcame setbacks in Australia and
South Africa to report a big jump in its cash pile in the latest
quarter, but was silent on whether it will increase a planned
capital return following the aborted purchase of a coal mine from
Peabody Energy Corp. (BTU).
South32 said its net cash rose by US$645 million to US$1.5
billion at the end of March, despite an underground fire at its
Cannington silver and base metals mine in Australia and heavy
rainfall in South Africa where it is a major producer of thermal
coal.
Last month the company said it planned to hand US$500 million to
shareholders, most likely via a share buyback, in another sign the
global mining industry is regaining its footing.
Analysts have speculated that South32, the company spun out of
BHP Billiton Ltd. (BHP.AU) in 2015, may top-up this capital-return
program after the miner walked away from a US$200 million deal to
buy Peabody Energy's (BTU) Metropolitan colliery in Australia's New
South Wales state, together with a stake in a coal port, citing
competition concerns.
On Thursday, South32 reported a mixed production performance in
the three months through March. Metallurgical coal output rose by
3% to 1.4 million metric tons compared to the prior quarter, while
manganese ore production also lifted 3% to 1.3 million tons.
However, energy coal production fell by 9% to 6.9 million tons
due to bad weather in South Africa and an associated delay in the
development of new mining areas at the Wolvekrans-Middelburg
Complex.
Alumina and aluminum production each fell 2% on quarter to 1.3
million tons and 245,000 tons, respectively.
Write to David Winning at david.winning@wsj.com
(END) Dow Jones Newswires
April 26, 2017 19:55 ET (23:55 GMT)
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