The South32 Ltd (ASX: S32) share price is on the rise in early morning trade after the company made three announcements this morning.
The metals and mining company first released a mineral resource update from its Hermosa Project. Then it announced it will face a US$728 million pre-tax impairment charge for its Illawarra Metallurgical Coal operations. Finally, South32 released a report detailing its activities over the recent quarter.
Right now, the South32 share price is $2.88 – 2.49% higher than its closing price yesterday.
Let's start by taking a look at South32's quarterly report.
The news driving the South32 share price
Quarterly report
Perhaps the most notable news to influence the South32 share price today is its quarterly report.
South32 has reported that Worsley Alumina, Brazil Alumina, and Australia Manganese all saw record annual production in the 2021 financial year.
Additionally, South African Manganese and Illawarra Metallurgical Coal saw respective annual production increases of 21% and 9% when compared to the 2020 financial year. Cannington saw its zinc production increase by 14% over the 12 months ended 30 June.
Additionally, Cerro Matoso saw its nickel production lift 54% in the fourth quarter of the 2021 financial year.
The company's production of energy coal and payable nickel have dropped 19% and 16% respectively over the 12 months ended 30 June.
At the same time, its production of payable lead and silver have increased 19% and 16% respectively.
The company also benefited from higher realised prices of aluminium, domestic coal, nickel, silver, and lead. While the prices of metallurgical coal and energy coal dropped 21% and 22% respectively.
Over the quarter just been, South32 has completed its divestment of South Africa Energy Coal. It also purchased 172 million of its own shares as part of an on-market buyback.
Impairment charge
Potentially weighing on the South32 share price this morning is its announcement that its full year results for the 2021 financial year will include a pre-tax impairment charge of US$728 million.
The company says the charge is due to the impact of the New South Wales Independent Planning Commission's refusal to approve South32's application for Illawarra Metallurgical Coal's Dendrobium Next Domain life extension project.
South32 is now considering its next move. That could be taking the project to the Land and Environment Court of New South Wales or submitting an alternative mine plan to the NSW Minister for Planning and Public Spaces.
The company expects to have more news on the project before the end of year.
Updated mineral resource estimate
The final news that's likely driving the South32 share price this morning is regarding its Hermosa Project.
The company has reported an update to the Arizona-based project's mineral resource estimate.
The updated estimate is 138 million tonnes, constituting an average of 3.82% zinc, 4.25% lead, and 81 grams per tonne of silver. Those figures equal a contained 5.3 million tonnes of zinc, 5.9 million tonnes of lead, and 360 ounces of silver.
That's greater amounts of zinc, lead, and silver than the project's previous mineral estimate.
However, the update has brought a 17% decrease to the estimated tonnage.
Additionally, it has reported a reduction to the estimated net smelter return cut-off grade of US$80 per dry metric tonne.
The project's pre-feasibility study was due to be released last month but it has been delayed due to COVID-19 restrictions.
South32 share price snapshot
The South32 share price has been performing well lately.
Its shares have gained 16.6% since the beginning of 2021. They're also 30% higher than they were this time last year.
The company has a market capitalisation of around $13.3 billion, with approximately 4.6 billion shares outstanding.
