SMM4, March 20: recently, South32 released its first quarter 2020 results, South32 CEO GrahamKerr said, in our operations, so far this year, we have achieved excellent operating results, Brazil's alumina and hillside aluminum industry's record production highlights this point. Despite the market turmoil, we will continue to work to reshape and improve our portfolio, form AmblerMetals joint ventures, promote the sale of energy coal in South Africa, and maintain the momentum of Hermosa. On the manganese side, the guidance for our operations in South Africa and Colombia was removed and the production guidance for Australian manganese for fiscal year 2020 was reduced by 5 per cent.
Australian manganese industry
In the nine months to March 2020 (9m YTD20), Australian manganese ore production fell 1 per cent (15kwmt) to 2616kwmt, due to a decline in primary circuit production after heavy rains at the end of fiscal year 2019, partially offsetting increased demand for low-cost concentrate ore (PC02) products.
We continue to run PC02 circuits above their design capacity, contributing 11 per cent of total production in the nine months to March 2020 (compared with 10 per cent in the same period last year). Manganese ore sales fell by 12% in the first quarter of 2020, due to lower production and lower shipments due to port quarantine delays.
Production guidance for fiscal year 2020 fell 5 per cent to 3375kwmt, reflecting a decline in throughput since the start of the year and a reduction in expected productivity at the end of the year as a result of temporary scheduling changes to the epidemic. For the remainder of the current financial year, the guidelines are not further affected by epidemic restrictions or measures. We will also continue to monitor the potential impact of the rainy season and market conditions on our adjusted production guidance for fiscal year 2020.
In the nine months to March 2020, marketable production of manganese alloys fell by 29 per cent (or 33kt) to 81kt as one of the four furnaces remained offline. After reviewing activities in the light of market conditions and updating our exchange rate assumptions for the remainder of fiscal year 2020, guidance for maintaining capital expenditure has been reduced by $1 million (or 2 per cent) to $63 million.
South African manganese industry
Manganese ore production in the manganese industry in South Africa fell 7 per cent (111kwmt) to 1504kwmt in the nine months to March 2020 as we reduced the use of high-cost trucks and carried out long-term maintenance of the Wessels mine in the fourth quarter, depending on market conditions.
As previously reported, the production guidance for fiscal year 2020 was cancelled as the national blockade in South Africa, which began at midnight on 26 March, is now scheduled to expire on 30 April. At the beginning of the lock, we temporarily maintained the production of manganese ores and alloys. Subsequently, we requested and obtained approval from the Government to carry out limited activities during the lock-up period and partially reorganized the manganese mine business in order to resume production activities at a lower rate in the second quarter of 2020.
In the nine months to March 2020, marketable production of manganese alloys increased by 2 per cent (or 1kt) to 48 kt, and our Metalloys smelter is still undergoing temporary maintenance.
After reviewing activities in the light of market conditions and updating our exchange rate assumptions for the remainder of fiscal year 2020, guidance for maintaining capital expenditure has been reduced by $5 million (or 19 per cent) to $21 million.
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