Alcoa moves for South32 aluminium assets

Alcoa US aluminium producer Alcoa has agreed to buy South32’s bauxite, alumina and aluminium assets in Australia, Brazil and South Africa in a deal worth $4.1bn upfront. The transaction will see Alcoa pay $3.1bn in cash and issue about 17m new shares valued at roughly $1bn. South32 could also receive up to $750m in contingent cash payments linked to alumina and aluminium prices through 2030. South32 put the implied enterprise value of the deal at up to $5.6bn, including about $750m in net debt and lease liabilities to be assumed by Alcoa and the contingent consideration. The assets being sold include South32’s 86% stake in Worsley Alumina in Western Australia, its 100% interest in the Hillside aluminium smelter in South Africa, a 33% stake in Brazil’s MRN bauxite mine, and its interests in the Brazil Alumina refinery and Brazil Aluminium smelter. South32’s Mozal aluminium smelter in Mozambique is excluded from the deal and remains on care and maintenance, with a sale still under review. Alcoa said the acquisition would lift its pro forma 2025 production to 3.2m tonnes of aluminium and 14.8m tonnes of alumina. The Pittsburgh-based company expects about $900m in net present value synergies from the deal, mainly through integrating Western Australian mining and refining operations and consolidating its position in Brazil. For South32, the sale marks a major reshaping of its portfolio towards upstream base metals. Matt Daley, chief executive officer of South32, said around 85% of the company’s pro forma EBITDA would come from base and precious metals after completion. The deal is expected to close in the first half of 2027, subject to South32 shareholder approval, regulatory clearances and other closing conditions. South32 plans to distribute at least half of the Alcoa shares it receives directly to eligible shareholders, with the rest to be sold in an orderly manner. The deal comes as bauxite and alumina trades remain closely watched by dry bulk owners. Alcoa already has exposure to Guinea through its stake in Compagnie des Bauxites de Guinée. CBG was formed in 1963 by the Guinean government and Halco Mining to develop bauxite in the Boké region. The Guinean state owns 49% of CBG, while Halco holds 51%. Alcoa owns 45% of Halco. Guinea’s growing role in the bauxite trade has become a bigger issue for shipping. Guinea has been looking to use its position as the world’s key bauxite supplier to gain greater control over pricing and the structure of the industry. The country has also been tightening control over mining and export activity, with authorities pushing for more local processing and greater state influence over mineral flows. For bulk shipping, that matters because changes in bauxite sourcing, export controls or alumina refining locations can quickly alter tonne-mile demand. Splash has reported this year on bauxite becoming one of dry bulk’s main growth trades, helped by long-haul Guinea-China cargoes and rising Chinese import dependence. Bauxite was also a hot topic at this year’s Geneva Dry conference, with organisers set to add a standalone bauxite session for the 2027 edition of the Swiss event after feedback from delegates. Adis Ajdin Adis is an experienced news reporter with a background in finance, media and education. He has written across the spectrum of offshore energy and ocean industries for many years and is a member of International Federation of Journalists. Previously he had written for Navingo media group titles including Offshore Energy, Subsea World News and Marine Energy. Read Next July 1, 2026 CMA CGM buys FedEx logistics arm in $1.4bn US push July 1, 2026 COSCO orders 24 bulkers in $1.27bn leasing play July 1, 2026 Diana keeps pressure on Genco with tender extension July 1, 2026 US targets Mexican cartel fuel smuggling July 1, 2026 Oceaneering lines up six months of offshore survey work