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South32 cash builds

Diversified miner South32’s net cash increased by US$163 million in the September quarter to $527 million after the company allocated a further $74 million to its buy-back program.
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South32's Illawarra Metallurgical Coal operation in New South Wales

Staff reporter

The company benefitted from an unwind in working capital, despite an increase in finished goods inventory during the quarter.

Guidance was maintained for FY20 for all operations.

Highlights of the September quarter included a record three months at Brazil Alumina, a 30% jump in output at Illawarra Metallurgical Coal and a 10% rise in manganese ore production.

"With macro conditions creating headwinds for our key commodities, we remain focused on driving cost and operating performance across our portfolio," South32 CEO Graham Kerr said.

"Our disciplined approach to capital allocation has allowed us to return a further $74 million with the continuation of our $1.25 billion capital management program, and following the end of the quarter pay our $139 million ordinary dividend in respect of the prior six months."

The company invested $17 million in exploration during the quarter, including $3 million on early stage greenfields projects.

South32 said it remained on track to finalise an exit from its South Africa Energy Coal business during the current quarter.

Shares in South32 dropped 0.6% to A$2.445, not far off the 52-week low of $2.36 set in late August.