By Rhiannon Hoyle
Australian miner South32 said production will be lower than previously envisaged this year at its Cannington mine, one of the world's largest sources of silver and lead.
The company downgraded its fiscal 2025 production guidance for the operation by 10% on Thursday, citing challenging geotechnical conditions that made it harder to access higher-grade areas of the mine.
Output from the underground mining operation, which also produces zinc, fell by 27% from a year earlier in the three months through March, to 50,200 metric tons of zinc equivalent. Production was 37% below the previous quarter.
The Cannington mine, located on a former sheep and cattle station in Australia's Queensland state, is managing "increased underground activity and complexity," South32 said.
The company now expects full-year production of 239,200 tons of zinc equivalent there. It produced 285,200 tons in the previous fiscal year.
South32 also expects the mine's annual operating costs to be roughly 11% higher than previously forecast because it is processing less ore.
"Looking forward, we are completing work to assess optimal underground mining rates and stope sequencing to manage continued geotechnical challenges and unlock value over the remaining mine life at Cannington," the company said.
With the exception of Cannington, South32's quarterly output of commodities including copper and aluminum was broadly in line with market estimates, analysts said.
The company said third-quarter copper-equivalent production at the Sierra Gorda mine in Chile rose by 19% from a year earlier, while aluminum production in the Brazil Aluminium business rose by 38% over the same period.
"Looking ahead, our focus on operating discipline, active cost management and a strong balance sheet leaves us well positioned to manage a period of potential uncertainty in global markets," Chief Executive Graham Kerr said.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
April 16, 2025 22:18 ET (02:18 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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