Unexpected cost pressures including a weaker US dollar, rising raw material costs and the environmental policy changes in China could increase South32 Ltd's (ASX: S32) costs beyond the full year expectations.
While unit costs so far are in line with expectations, the company warned on Thursday that additional cost inflation could push costs upward for the rest of the year.
South 32's net cash position has increased $42 million in this quarter, despite the $US750 million capital management program and the prepayment associated with the increased acquisition with Arizona Mining.
South32 also reconfirmed its output guidance across its operations, with lower volumes from its Queensland and South African energy coal business during the quarter due to planned maintenance and operational changes.
Shares in South32 closed down 2.48% at $3.15 pm Thursday, after reaching an all-time high of $3.43 only two weeks ago.
