South32 copper output rises 2% but misses analyst estimates

South32 Limited ASXS32 LONS32 OTCMKTSSOUHY reported on Monday that September-quarter payable copper production rose to 18,700 tonnes. The result was 500 tonnes below the 19,200-tonne Visible Alpha consensus reported by Reuters, while annual production guidance remained unchanged.

Shares fell to A$4.50 at 12:22 p.m. AEDT on Monday in Sydney trading ASXS32.

The diversified miner's copper output represents its 45 per cent share of Chile's Sierra Gorda operation, which it does not operate. The quarterly report, dated Oct. 19, recorded 18,300 tonnes for the same period a year earlier.

South32 ended the September 2026 quarter with net cash of US$297 million, up US$14 million. It received a US$153 million distribution from Sierra Gorda during the quarter.

Payable copper sales increased to 17,300 tonnes in the September quarter from 17,200 tonnes a year earlier. The company retained guidance across all operations for its fiscal year ending in June 2027.

"Sierra Gorda also commenced execution of the fourth grinding line project, which is expected to increase processing capacity by 25 per cent, increasing our exposure to copper," chief executive Matt Daley said in the quarterly report.

Read more: Rio Tinto keeps 2026 guidance as Oyu Tolgoi copper output rises 27 per cent

Cannington's payable zinc-equivalent production fell 27 per cent from the June quarter to 59,200 tonnes. A temporary reduction in paste backfill availability delayed access to planned mining areas, so the operation supplemented mill feed with lower-grade stockpiles.

South32 expects upgrades to the paste delivery system to support higher mining rates over the remainder of fiscal 2027. Continued processing of lower-grade stockpiles will provide additional mill feed.

The September 2026 quarter also brought a working-capital build of about US$80 million, primarily reflecting shipment timing that increased inventories and payments accrued in the prior period. The report separately identified approximately US$300 million of quarter-end cash subject to the proposed aluminium asset sale's locked-box mechanism.

The quarter-end net cash figure preceded a US$242 million ordinary dividend for the June 2026 half year, which South32 said it paid after the reporting period. The company returned US$13 million through share buybacks during the September quarter.

South32 invested US$197 million at Hermosa during the September 2026 quarter, advancing Taylor's underground and surface construction. Crews extended the decline, continued sinking the main and ventilation shafts, and installed flotation cells and major electrical transformers.

Hermosa also absorbed approximately US$15 million of lease payments for self-generated power and other assets in the September 2026 quarter.

Both Taylor shafts are expected to reach the primary production level in the December 2026 quarter.