April 22 (Reuters) – Diversified miner South32 cut its full‑year forecast on Wednesday for its Australia Manganese unit after wet-season rainfall and Tropical Cyclone Narelle disrupted operations, and warned of rising costs from the Middle East conflict.
In March, Cyclone Narelle forced the company to temporarily halt operations at its Gemco manganese mine in the Northern Territory and evacuate non-essential personnel from the site.
The company now expects fiscal 2026 production for its Australia Manganese unit to come in at 3 million wet metric tons (wmt), down more than 6% from its previous forecast.
Beyond weather disruptions, South32 warned that geopolitical tensions in the Middle East resulted in higher global freight rates and increased raw material input prices as factors likely to drive operating cost inflation for the remainder of the financial year.
“We have implemented measures across our operations to mitigate potential supply chain impacts arising from the conflict in the Middle East,” South32 said.
“While not currently experiencing diesel fuel shortages, we continue to closely monitor the situation.”
The company noted that these external pressures could see operating unit costs rise at its Worsley Alumina and Brazil Alumina projects if the situation persists.
Australia Manganese produced 589,000 wmt in the March quarter, compared with no output a year earlier, when its primary concentrator was shut after stockpiles were built ahead of the wet season.
South Africa’s manganese production rose to 500,000 wmt from 476,000 wmt in the prior-year period, despite scheduled maintenance during the quarter.
The combined manganese output from its Australian and South African operations was 1.09 million wmt in the March quarter, up from 476,000 wmt a year earlier, but missed Visible Alpha consensus estimate of 1.25 million wmt.
Shares of South32 were down 0.7% at A$4.44, as of 0106 GMT.
(Reporting by Kumar Tanishk in Bengaluru; Editing by Maju Samuel and Sherry Jacob-Phillips)
