South32 (ASX: S32) – South32 September 2026 Quarterly Report

South32 maintained its full-year production guidance across all operations in the September quarter despite operational challenges at its Cannington mine, signaling management confidence in achieving targets. The company reported net cash of US$297 million, up US$14 million from the prior quarter, helped by a US$153 million distribution from its 45 percent stake in Sierra Gorda and continued investment in growth projects. Shareholders also approved the sale of South32’s aluminium assets to Alcoa Corporation on 15 October, with completion expected in the June 2027 half year, marking a significant strategic shift toward upstream base metals.

Sierra Gorda delivered strong operational performance, with payable copper equivalent production rising 11 percent to 22.4 thousand tonnes on the back of higher planned copper grades that outweighed temporary wet weather impacts. The operation paid a record quarterly distribution of US$153 million to South32. More significantly, the joint venture partners approved the fourth grinding line project during the quarter, expected to increase processing capacity by 25 percent to around 60 million tonnes per annum from mid-2030. This expansion represents material upside to long-term copper production and cash flow, with full production rates anticipated in FY31.

Cannington reported a 27 percent decline in payable zinc equivalent production to 59.2 thousand tonnes, reflecting a temporary reduction in paste backfill availability that delayed access to planned underground stopes. The operation maintained ore processing volumes by supplementing mined ore with lower-grade stockpiles, demonstrating operational flexibility during the constraint. South32 expects paste delivery system upgrades to support higher mining rates through the remainder of FY27, with mine life extension studies to be updated alongside first-half results.

Manganese production increased 14 percent as Australia Manganese benefited from improved operating conditions following heavy rainfall in the prior quarter, while South Africa Manganese lifted underground productivity at Wessels. Alumina production increased modestly, with both Worsley and Brazil Alumina operating near nameplate capacity. The company continued heavy investment in growth, spending US$197 million on Hermosa’s Taylor zinc-lead-silver project in the quarter, with both production shafts expected to reach the primary production level in December 2026.

Capital management continued with US$13 million returned to shareholders via on-market share buybacks at an average price of A$5.04 per share. The US$2.6 billion capital management program is 92 percent complete with US$196 million remaining to be returned ahead of its scheduled expiry in September 2027. Following the quarter, South32 paid a fully-franked ordinary dividend of US$242 million in respect of the June 2026 half year.

Investors should monitor Cannington’s recovery trajectory as paste delivery upgrades are implemented, Sierra Gorda’s execution of the fourth grinding line project, and regulatory approvals for the Alcoa transaction. The Hermosa shaft development milestone in December and the completion of the federal permitting process under FAST-41 represent key catalysts for the company’s transformation into a focused base metals producer. This announcement is price sensitive and has been flagged as material by the ASX.

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About South32 Limited (ASX: S32)

South32 Limited is a diversified metals and mining company headquartered in Perth, Australia. The company produces bauxite, alumina, aluminum, copper, silver, lead, zinc, and manganese through operations across multiple segments including Worsley Alumina, Brazil Alumina, Sierra Gorda, Cannington, and others. It operates globally with assets in Australia, South Africa, Brazil, Chile, Mozambique, Colombia, and the United States.

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