Kerr was speaking at the Melbourne Mining Club today, just two weeks after the first anniversary of South32’s listing.

“When South32 listed last May, it was one of the most complex demergers in mining history,” he said.

“It wasn’t easy. But was it the right thing to do? Based on our results so far - I’d say yes.”

Kerr said the company had adopted a new way of working to de-layer the business and optimise the performance of its operations.

“In just 12 months, we’ve radically restructured our operations to reset the cost base and we’re on track to achieve controllable cost savings of $US300 million this financial year,” he said.

“We are working smarter and focused on growing cash flow per share – without compromising safety. We will come through this difficult price environment a stronger company.”

Kerr said commodity prices had been worse than the company’s low-case scenario had envisaged.

“Yet, we have reduced net debt by $US692 million. We are now in a position of net cash and we’ve maintained our credit rating,” he said.

“Our low financial gearing and operational leverage, is a powerful combination.”

On numerous occasions I’ve been asked, why I chose to move to South32. The people who know me well will tell you it was an easy decision.

Kerr said South32 would be disciplined in how it deployed capital, but was open to acquisition opportunities, particularly in base metals.

“However, looking at the high prices recently paid for copper assets, it is difficult to see how value will be created for shareholders,” he noted.

“So we look at all opportunities between the two book ends and if we can’t create value, we won’t do it.

“I am not convinced we are through the challenging price environment. I’m sure there is still more pain to come. So we can, and will, be patient.”

South32 shares are down 29% since listing in May 2015, but are up 36% so far this year (despite bottoming at A89c in January).

 

Shares closed 4c lower at $1.45 today.