Diversified miner South32 has again issued a warning about cost pressures, saying it expects raw material input prices to rise across the industry.
The company has said its unit costs were tracking to plan by the end of its first fiscal quarter, but has previously warned that rising raw material costs and a weaker US dollar could put its full-year unit cost guidance for its commodities at risk.
"Should these external pressures persist across the remainder of the year, we will not be immune to additional cost inflation," chief executive Graham Kerr told the company's annual general meeting in Perth on Thursday.
South32, which was spun off from BHP Billiton in 2015, is the world's largest producer of manganese ore, and also operates significant assets in the coal, nickel, alumina, silver, zinc and lead sectors.
A recovery in most commodity prices and a sharp reduction in costs swung the miner to a $US1.23 billion net profit in 2016/17, compared to a $US1.6 billion loss in the previous year.
The company is continuing to improve its portfolio and will seek more exposure to base metals through exploration partnerships, Mr Kerr said.
South32 earlier this year said it was pursuing base metals opportunities in four countries, and had entered into new exploration agreements with AusQuest Limited for Western Australia and Peru, and Trilogy Metals for deposits in Alaska.
Meanwhile, the miner had completed the purchase of shares worth $US282 million by the end of October, as part of its $US750 million share buyback program.
South32 shares were up three cents, or 1.2 per cent, at $3.36 at 1500 AEDT.
