The company has wiped $580 million off the value of its Worsley operations amid concerns native forest protection rules could threaten its long-term viability.
Shares in South32 slumped by more than 11 per cent to a 16-week low on Monday as the miner downgraded production forecasts for Worsley and two other assets.on the refinery, where about 1700 people are employed to turn bauxite mined in the jarrah forests near Boddington into alumina powder for export.
The EPA also set annual emissions limits for the mine, and asked South32 to protect old-growth forest and sections that have less than 30 per cent of native bushland remaining.with poor productivity over the past year because environmental conditions imposed on the operations have slowed its ability to move into new mining zones in the forest.Those delays forced Alcoa to feed its refineries with lower-grade bauxite from mines that had already been stripped of their best geology.
Worsley is not the only South32 asset bound for lower production; copper output at Chile’s Sierra Gorda mine will decline by 7 per cent as it works through a section of geology with high clay content.Production at the Cannington zinc, silver and lead mine in Queensland will decline by 9 per cent in the year ahead, with South32 saying the underground section of the mine would become more “variable” as it nears the end of its working life.
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