South32 Lowers Manganese Outlook After Cyclone Impact

South32 Revises Production Forecast

South32 has reduced its full-year production guidance for Australia manganese by over 6% for fiscal year 2026. The adjustment follows operational disruptions caused by severe wet-season weather and Tropical Cyclone Narelle at its Gemco mine in the Northern Territory.

Operational Performance Overview

The new fiscal 2026 production target is set at 3 million wet metric tons. This revision comes after the company was forced to temporarily halt operations and evacuate non-essential staff in March. Despite the disruption, March quarter output from Australia Manganese was 589,000 wmt. The company's combined manganese output from Australian and South African operations reached 1.09 million wmt, which missed the Visible Alpha consensus estimate of 1.25 million wmt.

Impact on Market Supply

The downgrade in production guidance from a major global supplier could influence the manganese market by potentially tightening supply. The miss on quarterly consensus estimates also signals an underperformance that may concern investors. While South Africa's manganese production saw an increase to 500,000 wmt, it was not enough to offset the overall shortfall against market expectations.

Summary and Outlook

Although year-over-year production in the March quarter increased, the guidance cut highlights significant operational challenges. Market participants will closely watch South32's ability to stabilize operations and meet its revised, lower production targets for the upcoming fiscal year.

**FAQ**

**Q:** Why did South32 lower its manganese forecast?
**A:** The forecast was lowered due to operational disruptions at its Gemco mine caused by heavy rainfall and Tropical Cyclone Narelle.

**Q:** What is the new production guidance for Australia Manganese?
**A:** The revised guidance for fiscal year 2026 is 3 million wet metric tons, a reduction of more than 6% from the previous forecast.

**Q:** Did South32's Q3 production meet market expectations?
**A:** No, the combined manganese output of 1.09 million wmt missed the Visible Alpha consensus estimate of 1.25 million wmt.

Source: Investing.com