South32 is off to a solid start in FY27 as reflected in its September 2026 Quarterly Report. The production guidance is valid for all operations. The news is now copper, with Sierra Gorda continuing to boost output and contribute to the group’s base metalfully franked32 Production Forecast 2027 Stays Unchanged.
South32’s production forecast for 2027 is unchanged for all operations. It was a good beginning this year, said Chief Executive Officer Matt Daley. He highlighted the major achievements of the company’s copper and zinc development initiatives. Net cash increased by US$14M for the quarter to reach US$297M.
The cash lift was despite high expenditure. Sierra Gorda made a US$153M distribution to South32. It also continued its investment in Hermosa and took on a temporary working capital build of around US$80M. The company has then paid a fully franked ordinary dividend of US$242M for the June 2026 half.
South32 maintains FY27 outlook unchanged as copper and zinc projects progress. [Reuters]
Why South32 Copper Production Is Gaining Momentum
The company’s copper production is increasing at Sierra Gorda, where it has a 45% stake. Production of copper equivalent rose by 11 per cent to 22.4kt. The positive effect of higher planned copper grades outweighs any adverse effects caused by the wet weather.
Copper payable production was 18.7kt, an increase of 17% compared to the previous quarter. Sierra Gorda also distributed an all-time high of $153M during the quarter.
The South32 copper growth outlook also benefited from a big project start. The fourth grinding line has started to be executed following final investment decisions (FID). It should increase the processing capacity by 25-60Mtpa on a 100% basis.
First production will likely be mid FY30 and full rates will be in FY31. The fourth grader line upgrade will increase the processing capacity on Sierra Gorda by around 25%.
Where Other Operations Stand This Quarter
Other assets had mixed performance, so let’s take a look at the performance of each one:
- Cannington: Payable zinc equivalent production was down 27 per cent to 59.2kt. Planned stopes were delayed due to the delay in access caused by a temporary paste backfill reduction. The guidance is at 290.0kt.
- Australia Manganese: Saleable production grew by 15% to 902 kt. Improved utilisation of primary circuits and reduced wet weather.
- South Africa Manganese: Output increased 11% to 588 kt. The increase was generated by higher numbers of underground products at Wessels.
- Worsley Alumina had 966kt of aluminium and Alumina production. Hillside Aluminium attained 177kt levels, and Brazil Aluminium reached a new level of 40kt.
How Hermosa and Ambler Support Growth
Base metals are seeing growth capital, and several milestones have been reached:
- South32 spending the funds on the Taylor zinc-lead-silver project, US$197M was spent in the quarter.
- Shaft progress: It is believed that both shafts will be at the main production level in the December 2026 quarter.
- Permitting win: On 2 September 2026, the US Forest Service released a Final Mine Plan. This is a final federal permit (FAST-41).
- The joint venture, Ambler Metals, drilled the Arctic deposit for over 5,000m.
- Trilogy Metals sale: On 11 September 2026, South32 sold 8.2M shares to the US Government for US$17.8M.
When the Alcoa Sale and Capital Returns Land
Shareholders also approved a significant portfolio change, and the following are the critical data and dates:
- Shareholders voted in favour of the sale of the aluminium value chain assets to Alcoa on 15 October 2026.
- Early completion subject to regulatory approvals – June 2027 half-year.
- Buy-back progress: South32 has bought back US$13M, using an average of A$5.04 per share.
- Capital programme: 92% of the US$2.6B programme is complete, with US$196M to go before 10 September 2027.
- An update on the life of the mine is expected in conjunction with the H1 FY27 results.
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Frequently Asked Questions
Q1: How much does South32 expect to produce in FY27?
A1: No change to guidance; all operations. Sierra Gorda remains at 91.8kt and Cannington at 290.0kt.
Q2: Why did the output of Cannington decrease by 27%?
A2: There was temporary reduced availability of paste backfill, which prevented access to planned stopes. Output was 59.2kt, supplemented by lower-grade stockpiles.
Q3: When will the Alcoa sale end?
A3: It is envisaged that the works will be completed in the June 2027 half-year. The shareholders approved the deal on 15 October 2026.
Q4: What good does the fourth grinding line do to copper?
A4: It increases the processing capacity by around 25% to ~60 Mtpa. First production will be offered in mid FY30 and full rates will be offered in FY31.
Disclaimer:
The following is a summary of South32’s Quarterly report dated 28 September, 2026 and is general information only. Not a financial or investment recommendation. Production guidance, project schedules and the Alcoa transaction will be subject to the operating conditions and regulatory approvals. Numbers are based on the company-reported information and can change. Investors are asked to read the original report and seek advice from a licensed adviser before deciding to invest in South32.
Elizabeth Jones is a finance and mining content specialist with over 10 years of experience creating clear, SEO-driven content across fintech, investing, banking, insurance, cryptocurrency, and resource markets. She transforms complex financial data and industry trends into engaging, reader-focused articles that improve understanding and audience engagement.
