CANBERA (dpa-AFX) - South32 Ltd. (SOUHY.PK, SHTLF.PK), an Australian mining and metals company, said that it will record impairment expenses of about US$554 million pre-tax for Worsley Alumina and approximately US$264 million pre-tax for Cerro Matoso in its fiscal year 2024 financial results.
South32 reported that its fourth quarter Alumina production was 1.249 million tonnes unchanged from last year. But quarterly Aluminium production slightly decreased to 285 thousand tonnes, from 286 thousand tonnes in the previous year.
Metallurgical coal production for the fourth quarter was 1.274 million tonnes, down from 1.504 million tonnes in the prior year.
The company has revised its fiscal year 2025 production guidance downward for alumina by 5%, Sierra Gorda payable copper equivalent by 7%, and Cannington payable zinc equivalent by 9%.
In a separate press release, South32 provided an update regarding regulatory approvals for new mining areas at Worsley Alumina.
In 2019, Worsley Alumina initiated the environmental approval process with the Western Australian Environmental Protection Authority (WA EPA) for the Worsley Mine Development Project to access bauxite for sustaining production.
On 8 July 2024, the WA EPA recommended the project's implementation with conditions. However, several of these conditions, if imposed in their current form, pose significant operational challenges and threaten the long-term viability of Worsley Alumina. The company believes that some conditions exceed reasonable measures for managing environmental risks, based on scientific assessments and decades of operational experience.
In response to the WA EPA assessment report, Worsley Alumina plans to appeal the decision. It targets securing environmental approvals for the proposal by the end of 2024.
Due to increased uncertainty resulting from the WA EPA's recommended conditions and the associated operational challenges, South32 has reassessed the carrying value of Worsley Alumina. Consequently, the company will recognize an impairment expense of approximately US$554 million in its fiscal year 2024 financial results.
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