Quarterly Report - September 2023

Production guidance (South32 share)	FY23	YTD FY24	FY24e^(a)	Comments
Worsley Alumina
Alumina production (kt)	3,839	972	4,000	Calciner maintenance completed in Q1 FY24 Further calciner maintenance scheduled in Q3 FY24
Brazil Alumina (non-operated)
Alumina production (kt)	1,262	318	1,400	Recovered from temporary port infrastructure outages
Brazil Aluminium (non-operated)
Aluminium production (kt)	69	24	100
Hillside Aluminium¹⁰
Aluminium production (kt)	719	180	720
Mozal Aluminium¹⁰
Aluminium production (kt)	345	84	365
Sierra Gorda (non-operated)
Payable copper equivalent production¹¹ (kt)	86.5	20.3	89.0
Payable copper production (kt)	70.7	16.0	67.0
Payable molybdenum production (kt)	1.2	0.4	2.5
Payable gold production (koz)	28.8	6.3	22.5
Payable silver production (koz)	630	145	550
Cannington
Payable zinc equivalent production¹² (kt)	259.6	70.3	287.2
Payable silver production (koz)	11,183	3,230	12,500
Payable lead production (kt)	101.7	28.5	115.0
Payable zinc production (kt)	59.2	13.2	62.0
Cerro Matoso
Payable nickel production (kt)	40.8	8.3	40.5	Planned maintenance and a temporary disruption to third-party gas supply
Illawarra Metallurgical Coal
Total coal production (kt)	6,520	1,168	5,000	Four longwall moves planned in FY24
Metallurgical coal production (kt)	5,497	1,043	4,400
Energy coal production (kt)	1,023	125	600
Australia Manganese
Manganese ore production (kwmt)	3,545	890	3,400
South Africa Manganese
Manganese ore production (kwmt)	2,108	628	2,000

South32 share	YTD FY23	YTD FY24	1Q23	2Q23	3Q23	4Q23	1Q24
Worsley Alumina (86% share)
Alumina hydrate production (kt)	957	973	957	998	921	957	973
Alumina production (kt)	920	972	920	1,002	905	1,012	972
Alumina sales (kt)	885	913	885	976	845	1,111	913
Brazil Alumina (36% share)
Alumina production (kt)	337	318	337	354	334	237	318
Alumina sales (kt)	313	272	313	365	317	242	272
Brazil Aluminium (40% share)
Aluminium production (kt)	8	24	8	15	22	24	24
Aluminium sales (kt)	3	8	3	16	23	26	8
Hillside Aluminium (100% share)
Aluminium production (kt)	179	180	179	183	177	180	180
Aluminium sales (kt)	162	170	162	175	197	185	170
Mozal Aluminium (63.7% share)
Aluminium production (kt)	92	84	92	90	81	82	84
Aluminium sales (kt)	87	77	87	90	43	114	77
Sierra Gorda (45% share)
Ore mined (Mt)	8.8	5.9	8.8	6.6	5.1	5.5	5.9
Ore processed (Mt)	5.4	5.5	5.4	5.3	5.1	5.4	5.5
Copper ore grade processed (%, Cu)	0.45	0.37	0.45	0.44	0.40	0.40	0.37
Payable copper equivalent production¹¹ (kt)	22.5	20.3	22.5	22.3	19.2	22.5	20.3
Payable copper production (kt)	19.0	16.0	19.0	18.9	15.5	17.3	16.0
Payable copper sales (kt)	19.2	15.3	19.2	19.2	15.4	18.0	15.3
Payable molybdenum production (kt)	0.2	0.4	0.2	0.2	0.3	0.5	0.4
Payable molybdenum sales (kt)	0.3	0.4	0.3	0.5	0.2	0.3	0.4
Payable gold production (koz)	7.8	6.3	7.8	7.5	6.2	7.3	6.3
Payable gold sales (koz)	7.7	6.3	7.7	7.7	6.4	7.3	6.3
Payable silver production (koz)	180	145	180	158	138	154	145
Payable silver sales (koz)	179	140	179	166	137	157	140
Cannington (100% share)
Ore mined (kwmt)	639	551	639	484	469	631	551
Ore processed (kdmt)	518	562	518	624	452	562	562
Silver ore grade processed (g/t, Ag)	179	206	179	171	191	210	206
Lead ore grade processed (%, Pb)	5.6	5.8	5.6	5.4	5.5	5.8	5.8
Zinc ore grade processed (%, Zn)	3.7	3.2	3.7	3.6	3.8	4.0	3.2
Payable zinc equivalent production¹² (kt)	61.1	70.3	61.1	69.7	54.3	74.5	70.3
Payable silver production (koz)	2,568	3,230	2,568	2,906	2,341	3,368	3,230
Payable silver sales (koz)	1,704	2,873	1,704	3,379	2,412	3,244	2,873
Payable lead production (kt)	24.6	28.5	24.6	27.8	21.0	28.3	28.5
Payable lead sales (kt)	18.7	25.6	18.7	32.6	21.7	26.0	25.6
Payable zinc production (kt)	14.0	13.2	14.0	16.4	12.6	16.2	13.2
Payable zinc sales (kt)	14.9	13.9	14.9	12.6	8.8	21.8	13.9
Cerro Matoso (99.9% share)
Ore mined (kwmt)	1,332	940	1,332	1,420	1,189	1,619	940
Ore processed (kdmt)	666	594	666	726	713	702	594
Ore grade processed (%, Ni)	1.63	1.57	1.63	1.65	1.58	1.62	1.57
Payable nickel production (kt)	9.6	8.3	9.6	10.8	10.2	10.2	8.3
Payable nickel sales (kt)	9.0	8.5	9.0	10.8	10.6	10.4	8.5
Illawarra Metallurgical Coal (100%)
Total coal production (kt)	1,595	1,168	1,595	1,736	1,436	1,753	1,168
Total coal sales¹⁵ (kt)	1,390	1,196	1,390	1,795	1,477	1,697	1,196
Metallurgical coal production (kt)	1,270	1,043	1,270	1,483	1,240	1,504	1,043
Metallurgical coal sales (kt)	1,193	996	1,193	1,485	1,195	1,529	996
Energy coal production (kt)	325	125	325	253	196	249	125
Energy coal sales (kt)	197	200	197	310	282	168	200
Australia Manganese (60% share)
Manganese ore production (kwmt)	898	890	898	946	832	869	890
Manganese ore sales (kwmt)	779	940	779	873	743	866	940
Ore grade sold (%, Mn)	44.3	42.9	44.3	44.1	44.0	43.1	42.9
South Africa Manganese (54.6% share)
Manganese ore production (kwmt)	562	628	562	531	429	586	628
Manganese ore sales (kwmt)	473	518	473	559	492	541	518
Ore grade sold (%, Mn)	38.5	39.0	38.5	39.8	38.8	39.4	39.0

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South32 Limited (DI) (S32)

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·	FY24 production guidance remains unchanged across all operations.
·	Manganese ore production increased by 4%, with a quarterly record at South Africa Manganese and a strong start to the year at Australia Manganese.
·	Alumina production increased by 3%, as Brazil Alumina recovered from temporary port infrastructure outages, while Worsley Alumina completed planned calciner maintenance.
·	Hillside Aluminium continued to test its maximum technical capacity and low-carbon aluminium¹ production from Brazil Aluminium and Mozal Aluminium increased by 2%.
·	Illawarra Metallurgical Coal production decreased by 33%, as the operation commenced an extended planned longwall move at the Dendrobium mine. A new industrial agreement covering deputies at the Appin mine was finalised subsequent to the end of the quarter.
·	Sierra Gorda payable copper production decreased by 8%, as higher throughput delivered by the plant de-bottlenecking project was offset by lower planned copper grades.
·	Cannington payable zinc equivalent production decreased by 6%, due to lower planned zinc grades in the quarter, with the operation remaining on-track to deliver 11% production growth in FY24.
·	Cerro Matoso payable nickel production decreased by 19%, as the operation was impacted by planned plant maintenance and a temporary disruption to gas supply.
·	We commenced federal permitting at our Hermosa project under FAST-41 and remain on-track to complete the feasibility study for the Taylor zinc-lead-silver deposit in Q2 FY24.

Production summary
South32 share	YTD FY23	YTD FY24	YoY	1Q23	4Q23	1Q24	QoQ
Alumina production (kt)	1,257	1,290	3%	1,257	1,249	1,290	3%
Aluminium production (kt)	279	288	3%	279	286	288	1%
Payable copper production (kt)	19.0	16.0	(16%)	19.0	17.3	16.0	(8%)
Payable silver production (koz)	2,748	3,375	23%	2,748	3,522	3,375	(4%)
Payable lead production (kt)	24.6	28.5	16%	24.6	28.3	28.5	1%
Payable zinc production (kt)	14.0	13.2	(6%)	14.0	16.2	13.2	(19%)
Payable nickel production (kt)	9.6	8.3	(14%)	9.6	10.2	8.3	(19%)
Metallurgical coal production (kt)	1,270	1,043	(18%)	1,270	1,504	1,043	(31%)
Manganese ore production (kwmt)	1,460	1,518	4%	1,460	1,455	1,518	4%
Unless otherwise noted: percentage variance relates to performance during the September 2023 quarter compared with the September 2022 quarter (YoY), or the September 2023 quarter compared with the June 2023 quarter (QoQ); production and sales volumes are reported on an attributable basis.

·	Supporting our commitment to deliver improved safety performance, we continued to implement our multi-year Safety Improvement Program, including significant investment in safety leadership through our 'Lead Safely Every Day' training.
·	We remain focused on driving cost performance to mitigate industry-wide inflationary pressure. During the quarter, we initiated a Group-wide review that is expected to deliver a reduction in expenditure across our operations and functions in FY24 and FY25.
·	Net debt² increased by US$299M to US$782M during the September 2023 quarter with lower commodity prices, and a temporary build in working capital of ~US$250M as we made payments accrued in the prior period and our high value aluminium inventory increased by ~US$100M. We expect to lower our aluminium inventory position to normalised levels during the December 2023 quarter, as Brazil Aluminium makes its first planned export sales and we drawdown inventory in our Southern African value chain.
·	We invested in productivity and improvement activities across our portfolio, allocating US$180M to safe and reliable, and improvement and life extension, capital expenditure³. This included our planned investment to support Illawarra Metallurgical Coal's transition to a more efficient single longwall configuration at the Appin mine from FY25 and additional ventilation capacity to enable mining in Appin's Area 7 until at least 2039⁴.
·	We received net distributions⁵ of US$33M (South32 share) from our equity accounted investments (EAI) during the September 2023 quarter, including US$15M from our manganese business and US$18M from Sierra Gorda.
·	We allocated US$22M to our on-market share buy-back during the September 2023 quarter, purchasing a further 10M shares at an average price of A$3.34 per share. Our US$2.4B capital management program is 95% complete with US$112M remaining to be returned ahead of its extension or expiry on 1 March 2024⁶.
·	Subsequent to the end of the quarter, we paid a fully-franked ordinary dividend of US$145M in respect of the June 2023 half year.
·	Our FY24 Underlying effective tax rate (ETR) is expected to reflect the corporate tax rates and earnings of the jurisdictions in which we operate⁷, including our manganese business and Sierra Gorda on a proportional consolidated basis (including royalty related taxes for Australia Manganese and Sierra Gorda). The impact of permanent differences can have a disproportionate effect on our Underlying ETR when profit margins are compressed.
·	Separately, the Group made tax payments of US$39M (excluding EAIs) during the September 2023 quarter, as cash tax normalised following one-off portfolio related tax payments in the prior period.

·	We invested US$71M of growth capital expenditure as we progressed construction of key infrastructure and commenced federal permitting for our Taylor zinc-lead-silver and Clark battery-grade manganese deposits.
·	We expect to complete the feasibility study and an independent peer review for the Taylor deposit in the December 2023 quarter and announce the study results and a final investment decision in the March 2024 quarter.
·	We commissioned the second water treatment plant, a key milestone in our critical path dewatering activity, and are on-track to commence construction of the Clark exploration decline in the December 2023 quarter.
·	We submitted a mine plan of operations for both the Taylor and Clark deposits with the US Forest Service, commencing the federal permitting process under FAST-41⁸.
·	We directed US$6M to capitalised exploration during the September 2023 quarter, as we continued exploration drilling at our copper-lead-zinc-silver Peake prospect, to follow-up recent high-grade copper exploration results⁹.

·	We invested US$9M in our greenfield exploration opportunities during the September 2023 quarter, including a first time exploration drilling program at our 100% owned Roosevelt project in Alaska.
·	Consistent with our focus on adding prospective base metals options, we acquired an additional 4.9% equity interest in Aldebaran Resources Inc. (Aldebaran Resources) for approximately US$8M, taking our ownership to 14.8%. Aldebaran Resources has an earn-in to acquire an 80% interest in the Altar copper project in San Juan, Argentina.

1.	Refers to aluminium produced using renewable power.
2.	Net debt number is unaudited and should not be considered as an indication of or alternative to an IFRS measure of profitability, financial performance or liquidity.
3.	Group safe and reliable capital expenditure and improvement and life extension capital expenditure (excluding EAIs). FY24 guidance is US$690M.
4.	The information in this announcement that relates to the Production Target for Appin (up to 2039) of Illawarra Metallurgical Coal is based on 21% Proved and 79% Probable Coal Reserves from Bulli (Appin). Production Target cautionary statement - The Coal Reserves estimates underpinning the Production Target have been prepared by Competent Persons and reported in accordance with the JORC Code. The Coal Resources and Coal Reserves estimates are available to view in South32's FY23 Annual Report (http://www.south32.net) published on 8 September 2023. The stated Production Target is based on South32's current expectations of future results or events and should not be solely relied upon by investors when making investment decisions. Further evaluation work and appropriate studies are required to establish sufficient confidence that this target will be met.
5.	Net distributions from our material equity accounted investments (manganese and Sierra Gorda) includes net debt movements and dividends, which are unaudited and should not be considered as an indication of or alternative to an IFRS measure of profitability, financial performance or liquidity.
6.	Since inception, US$1.7B has been allocated to the on-market share buy-back (788M shares at an average price of A$3.05 per share) and US$525M returned in the form of special dividends.
7.	The corporate tax rates of the geographies where the Group operates include: Australia 30%, South Africa 27%, Colombia 35%, Mozambique 0%, Brazil 34% and Chile 27%. The Mozambique operations are subject to a royalty on revenues instead of income tax. Sierra Gorda is subject to a royalty related tax based on the amount of copper sold and the mining operating margin, the rate is between 5% and 14% for annual sales over 50kt of refined copper. This royalty is included in tax expense.
8.	Refer to market release "Hermosa Project Update" dated 8 May 2023. In May 2023, our Hermosa project was confirmed by the US Federal Permitting Improvement Steering Council, an independent federal agency, as the first mining project added to the FAST-41 process.
9.	Peake Prospect Exploration Target: The information in this announcement that relates to Exploration Results for Peake prospect is extracted from the announcement entitled (Hermosa Project - Mineral Resource Estimate Update and Exploration Results) published on 24 July 2023 and is available to view on www.south32.net. The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement. The company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.
10.	Production guidance for Hillside Aluminium and Mozal Aluminium does not assume any load-shedding impact on production.
11.	Payable copper equivalent production (kt) was calculated by aggregating revenues from copper, molybdenum, gold and silver, and dividing the total Revenue by the price of copper. FY23 realised prices for copper (US$3.51/lb), molybdenum (US$21.28/lb), gold (US$1,821/oz) and silver (US$21.9/oz) have been used for FY23, Q1 FY24 and FY24e.
12.	Payable zinc equivalent production (kt) was calculated by aggregating revenues from payable silver, lead and zinc, and dividing the total Revenue by the price of zinc. FY23 realised prices for zinc (US$2,151/t), lead (US$1,919/t) and silver (US$21.1/oz) have been used for FY23, Q1 FY24 and FY24e.
13.	The first boiler conversion is expected to reduce the refinery's operational greenhouse gas emissions by up to ~205,000 tonnes per annum or ~6% from FY23 levels.
14.	Our realised price for nickel sales during the September 2023 quarter was US$6.19/lb, which represented a ~33% discount to the average LME Nickel index price of US$9.23/lb.
15.	Illawarra Metallurgical Coal sales are adjusted for moisture and will not reconcile directly to Illawarra Metallurgical Coal production.
16.	The sales volume weighted average of the Metal Bulletin 44% manganese lump ore index (CIF Tianjin, China) on the basis of a one-month lag to published pricing (Month minus one or "M-1") was US$4.53/dmtu in the September 2023 quarter.
17.	The sales volume weighted average of the Metal Bulletin 37% manganese lump ore index (FOB Port Elizabeth, South Africa) on the basis of a M-1 basis was US$2.99/dmtu in the September 2023 quarter.