South32's Steady Quarter Delights Investors, Shares Hit 2023 High
An uneventful yet consistent December quarter across South32's diverse portfolio has sparked investor enthusiasm, propelling the mixed metal miner's share price to its highest level since April 2023. The company's stable performance, described as "consistent" by outgoing chief executive Graham Kerr, has reassured the market amidst broader economic uncertainties.
Production Stability and Cost Guidance Maintained
South32 left its production and cost guidance for the 2026 financial year unchanged following a quarter that demonstrated operational resilience. Alumina production emerged as a particular highlight, increasing by 3 per cent in the second half of 2025. This growth was driven by record output from Brazilian operations and planned volumes from the Worsley Alumina operation in Western Australia's South West region, despite ongoing calciner maintenance.
RBC Capital Markets analyst Kaan Peker noted, "Given concerns around seasonal fires and wet weather, the strong volume and cost performance will be seen as a positive." This sentiment reflects how South32's ability to maintain operations under challenging conditions has bolstered investor confidence.
Significant Investment in Hermosa Project
The company continued to advance its strategic development projects, pouring $US338 million (approximately $497 million Australian) into the omni-commodity Hermosa project in Arizona during the half year. Construction progress included work on shafts and surface infrastructure for the Taylor zinc-lead-silver deposit, along with completion of the decline for the Clark battery-grade manganese deposit.
Mr Peker observed, "The development projects also showed strong momentum at Hermosa," indicating that South32's growth initiatives remain on track despite the otherwise quiet quarter.
Market Response and Leadership Transition
Investors responded positively to the quarterly update, with South32 shares finishing up 5.3 per cent to $4.40. This significant gain reflects market approval of the company's steady operational performance and strategic direction.
The miner is now preparing for a leadership transition, with Anglo American technical and operational director Matthew Daley joining South32 on February 2 as deputy chief executive. He will assume the top position when Mr Kerr steps down later in 2026. Mr Daley's recruitment involved a substantial compensation package, including a $2 million cash payment plus performance rights to facilitate his departure from Anglo American.
Mr Kerr, who has been South32's only chief executive since taking the reins during the 2014 demerger from BHP, will hand over to Mr Daley after more than a decade at the helm. The incoming CEO will receive a base salary of $2 million annually, supplemented by short-term incentives targeting 120 per cent of base salary and long-term incentives with an indicative face value of 200 per cent of salary.
This leadership change marks a significant moment for South32 as it continues to navigate the evolving resources sector while maintaining the operational consistency that has characterized its recent performance.
