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The South32 Limited (ASX: S32) share price is witnessing a decline today, as investors bid down shares amidst updates on the miner's Groote Eylandt project, which has been impacted by Cyclone Megan. Trading at AU$2.99 per share on Wednesday at 3:52PM AEDT, the diversified mining stock closed yesterday at AU$3.12, marking a 4.17% decrease.
In contrast, the broader ASX 200 Index (ASX:XJO) is experiencing a modest downtick of 0.10% during the same period.
Groote Eylandt operations affected due to Inclement Weather
The Groote Eylandt project, situated in Australia's Gulf of Carpentaria, plays a crucial role in South32's operations, producing high-grade manganese ore totaling 3,545 KWMT in FY 2023.
On Monday, South32 announced the temporary suspension of operations at its Groote Eylandt Mining Company (GEMCO) following the impact of Tropical Cyclone Megan. South32 holds a 60% stake in GEMCO, with Anglo American owning the remaining 40%.
The company cited heavy winds and surf as the cause of structural damage to the wharf, prompting the shutdown.
Despite the disruption, investor response remained relatively upbeat, with the South32 share price closing up 4.7% on Monday.
Today, South32 reiterated that operations remain suspended as crews assess the extent of the damage. Initial evaluations revealed flooding in the mining pits and significant damage to a critical haul road bridge connecting the northern pits of the Western Leases mining area to the processing plant.
Furthermore, the company confirmed "significant structural damage" to the wharf and port infrastructure.
South32 is actively working to resume operations safely, but the withdrawal of guidance on Australian manganese production may exert downward pressure on the share price today.
Further updates awaited
South32's forthcoming quarterly report is expected to provide additional insights into the impact of Cyclone Megan on its operations and financial performance.
