Stronger commodity prices pushed South32 into a profit for its interim period and strong free cash flow to give it a net cash position of $859m and well positioned for acquisitions and growth.

South32, which has assets in Australia, SA and South America, declared its first interim dividend of 3.6 US cents per share, or $192m.

Free cash flow for the six months to end-December was $626m. The company’s net cash position grew $547m to $859m.

South32 is buying Metropolitan Colliery in Australia for $200m and paying $192m in interim dividends. South32 recorded net profit of $620m from a $1.75bn loss the year before.

Revenue grew 8% to $3.2bn, with the increase in average realised prices for the commodities the company produces adding $661m to revenue.

Metallurgical and energy coal increased revenue by $313m, while manganese ore and alloy added $230m as the biggest contributors to the revenue line.

South32 CEO Graham Kerr said the manganese price had fallen sharply over the past five weeks and the company could rein in production at its flexible South African assets, which had produced in excess of its annualised 2.9-million tonnes capacity to take advantage of an increase in prices late last year.

Higher averaged realised silver, lead and zinc prices increased sales revenue a further $93m, the company said.

It kept its full-year production guidance in place for its range of commodities, which include thermal coal, manganese, nickel, aluminium and metallurgical coal.

For the balance of the year ahead, South32 said it was accelerating the development of the Las Esmeralda project at its Cerro Matoso nickel mine and advancing the life extension of its Klipspruit colliery in SA towards an investment decision. The Klipspruit project is the only major capital project in South32.

It was also spending money on exploration for high-grade manganese at its Australian operations and copper, nickel and platinum group metals at Huckleberry in Canada.

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