The company has flagged a pre-tax, non-cash charge of around $US1.7 billion in its half-year financial results due to the downward revision to commodity prices and demand.
The strategic review of 60%-owned South Africa Manganese has been completed following the suspension of mining at the Hozatel mines in November.
Mining will restart, but at a reduced rate and with greater flexibility, with Hozatel to ramp back up to 2.3 million tonnes per annum, a 23%, or 900,000 tonne per annum, reduction.
Sustaining capital will drop by around 80% to $7 million in the 2017 financial year.
South32 CEO Graham Kerr said the restructure of South Africa Manganese would allow the company to re-base ore production at lower levels while reducing rand-denominated mine gate costs.
The division will slash 620 jobs in South Africa, and reduce capacity at Wessels, Mamatwan and Metalloys.
South32 expects its share of restructuring costs to be around $10 million this year.
In addition, the company has extended the focus to its other assets, with plans for Illawarra Metallurgical Coal, Cerro Matoso, Worsley Alumina and Australia Manganese being finalised.
The company said the initiatives would results in a “substantial” reduction in employee numbers, with details to be outlined with the results on February 25.
“We will continue to focus on the things that we can control; safety, volume, costs and capital expenditure, as we seek to optimise the performance of our operations,” Kerr said.
“This strategy to maximise value rather than volume, our high-quality operations and well-defined financial policies underpin our resilience at current commodity prices and we remain exceptionally well-positioned for any improvement in industry fundamentals.”
Last month South32 reported that despite lower commodity prices, net debt at December 31 had fallen to $115 million from $196 million at the end of September and $402 million at June 30, 2014.
