North-West Queensland’s Cannington mine has had its wings clipped, with expected mining volumes lowered to an average of about 1.8Mtpa over FY26 to FY31.

That compares to 2.25Mt in FY24 and 1.96Mt in the last financial year, when Cannington saw its payable zinc equivalent production decrease by 20 per cent, according to the full-year report released today.

The expected drop in the next few years is in line with Cannington’s mine plan review, carried out in response to increased underground complexity.

South32 is the sole owner of the Cannington operation, which produces high-grade lead and zinc concentrates with a high silver content.

Processing rates are also revised lower and South32 said work was underway to optimise the cost base, including contractor and equipment requirements, in line with lower planned volumes.

It is also progressing plant modification work to improve recoveries for lower grade ore.

Meanwhile, the company has an eye further to the future – as it continues to advance work including a study into a potential open-pit development to unlock value from a mineral resource of 25Mt and capitalise on higher silver prices.

South32 said the established underground ore reserve of 10Mt supported a reserve life of six years at Cannington.

In addition to the open-pit potential, the company said it was progressing options to extend the mine life by targeting further growth from the underground mineral resource of 53Mt.

Underlying EBIT for the Cannington operation decreased by 1 per cent to $US204 million (about $313 million in Australian dollars) in FY25.

Higher average metals prices delivered a $US87 million advantage. This was offset by lower sales volumes, a drawdown of finished goods inventory and additional mining costs due to increased underground activity.

Across South32, the group reported a strong operating performance, with underlying EBITDA increasing to $US1.9 billion and underlying earnings increasing to $US666 million.

“We increased our production of commodities critical to the global energy transition, delivering annual production growth of 20 per cent in copper and 6 per cent in aluminium,” South32 chief executive officer Graham Kerr said.

“Key operational milestones were achieved, with Worsley Alumina securing environmental approvals for new bauxite mining areas, and Australia Manganese completing its operational recovery plan following the impacts of Tropical Cyclone Megan.

“At Mozal Aluminium, despite engaging with stakeholders for several years, we do not have confidence that the smelter will secure sufficient and affordable electricity supply beyond March 2026, when the current agreement expires. As a result, we are limiting investment in Mozal Aluminium, and currently expect that the smelter will be placed on care and maintenance in March 2026.

“We continued our portfolio transformation with the sale of Illawarra Metallurgical Coal and a binding agreement to divest Cerro Matoso, which further streamline our portfolio towards critical minerals, reduce complexity and unlock capital to invest in higher-returning growth options.

“We increased our investment in base metals growth projects, advancing construction of our large-scale, long-life Taylor zinc-lead-silver project at Hermosa, and progressing our pipeline of copper options in study and exploration phases.

“Reflecting our strong financial performance and disciplined approach to capital allocation, today we have announced a fully-franked ordinary dividend of $US117 million (US 2.6 cents per share) in respect of the June 2025 half year, and a 12-month extension of our capital management program, with $US144 million remaining to be returned to shareholders.”