By David Winning


SYDNEY--South32 said it expects it will take around a year to restart manganese ore exports from Australia following cyclone damage, unless it can find an alternative shipping option.

Operations at Gemco--Groote Eylandt Mining Company--in the Northern Territory were suspended last month after Tropical Cyclone Megan caused extensive damage to key infrastructure there, including the wharf and a haulage road bridge that connects the northern pits of the Western Leases mining area and the processing plant.

On Monday, South32 said engineering studies on the wharf and haulage road bridge have begun, which will determine how quickly they can be brought back into use and likely restoration costs.

South32 said it expects operations at the wharf and export sales to restart some time between January and March, 2025.

"Alternative shipping options are being evaluated to mitigate the impact of the wharf outage," said South32. "These options may establish partial ore export capability in advance of the wharf restoration."

South32, which withdrew guidance for its Australian manganese operation while it assessed the damage, said it is working to determine how much can be recovered under its insurance policy.

South32's manganese ore output in Australia fell by 18% to 645,000 metric tons in the three months through March compared to the previous quarter, reflecting the suspension of activity at Gemco. That brought manganese ore production in the first nine months of the current fiscal year to 2.32 million tons, down 13%.

South32 said quarterly production of all commodities other than nickel and metallurgical coal fell in the March quarter compared to the previous three months.

"With the exception of Australia Manganese, our FY 2024 production and operating unit cost guidance is unchanged, placing us in a strong position to capitalize on strengthening market conditions for many of our key commodities," said Chief Executive Graham Kerr.

South32 has been seeking to produce more of the metals it expects will be needed during the energy transition. In February, it approved the development of a $2.16 billion zinc, lead and silver mine in southern Arizona in the U.S.

Two weeks later, South32 agreed to sell its Illawarra Metallurgical Coal business in eastern Australia for up to $1.65 billion to an entity owned by Golden Energy and Resources and M Resources.


Write to David Winning at david.winning@wsj.com


(END) Dow Jones Newswires

04-21-24 1934ET