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South32 halts guidance as cyclone Megan batters manganese operations on Groote Eylandt

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By Colin Hay - 
S32 ASX GEMCO Groote Eylandt tropical cyclone Megan

South32 (ASX: S32) has confirmed it is withdrawing guidance for its Australia Manganese unit after its Groote Eylandt operations in the Northern Territory were hit hard by tropical cyclone Megan.

The company recently forecast Australia Manganese would produce 3.4 million wet metric tonnes for FY 2024.

However, it has had to temporarily suspend the Groote Eylandt Mining Company (GEMCO) operations due to damage caused by the tropical cyclone.

Located on the island of Groote Eylandt in the Gulf of Carpentaria, GEMCO is an open-cut, strip-mining operation that is one of the largest high-grade manganese ore producers in the world.

South32 owns 60% of GEMCO, with the remaining 40% held by Anglo American.

With weather conditions easing, the company said that access to key infrastructure has been restored to enable an initial assessment of the impact.

Widespread damage

Initial assessments of the impact on the operations has identified flooding in the mining pits, as well as significant damage to a critical haul road bridge that connects the northern pits of the Western Leases mining area and the processing plant.

Major structural damage to the wharf and port infrastructure was also confirmed.

The company said it is continuing its assessment of the damage as it works towards a return to safe operations as soon as possible.

It also confirmed it is investigating alternative shipping arrangements.

“While we complete this work, we are withdrawing guidance for Australia Manganese and will provide a further update in our March 2024 Quarterly Report,” the company said in an ASX announcement.

“The full impact of the damage and subsequent disruption to production and sales volumes will be assessed when access to the port and other infrastructure is restored.”

Region hit hard

The NT government announced today that disaster assistance is now available for regional communities following the impacts of the cyclone and associated severe weather in the local government areas of East Arnhem, Roper Gulf and West Arnhem.

The assistance, jointly funded by the Australian and NT governments through the Disaster Recovery Funding Arrangements, may include freight subsidies to primary producers and assistance to non-profit organisations, along with support for local councils and residents to help with clean-up costs and the restoration of essential public assets.

Federal Minister for Emergency Management Murray Watt said that, while the cyclone has been downgraded to a tropical low, it is still a dangerous situation with a significant amount of rain expected to fall over coming days.

“We are continuing to monitor conditions on the ground, while rolling out support as quickly as possible.”

NT Chief Minister Eva Lawler said tropical cyclone Megan had caused damage, displacement and disruption to the lives of many in the region.

“This is still an active system as it moves west across the NT and we are prepared for the possibility of further widespread flooding in the regions.”

“This has been a big wet season and we are responding to the needs of Territorians.”