South32 shares slump after Worsley impairment
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More news: Shares in South32 slumped more than 10% to $3.07 in early trading on the ASX after the global miner said it would write down the value of its Worsley Alumina business in Western Australia.
This was due to delays in environmental approvals for new bauxite mining. South32 outlined an impairment of US$554 million ($827 million) for Worsley in its FY24 financial results, reducing its carrying value to US$2.03 billion.
South32 to write down Worsley value over environmental approval delay
The news: Mining giant South32 will write down the value of its Worsley Alumina business over delays in environmental approvals for new bauxite mining.
The numbers: The global miner will recognise an impairment expense of USD554 million ($827 million) for Worsley Alumina in its FY24 financial results, reducing its carrying value to USD2.03 billion.
The context: South32 said the decision comes after the Western Australian Environmental Protection Authority (WA EPA) earlier this month gave its approval for bauxite mining after a five-year long process, but with conditions that “create significant operating challenges for Worsley Alumina and impact its long-term viability”.
Worsley plans to appeal the WA EPA assessment report, but is still aiming to secure environmental approvals for the proposal by the end of 2024.
South32 said it decided to write down the value of Worsley “having regard to the increased uncertainty created by the WA EPA’s recommended conditions and associated challenging operating conditions”.
The source: ASX announcement
