01 JULY 2026
Alcoa will acquire South32’s interests in Worsley Alumina, Hillside Aluminium, MRN bauxite mine (subject to exercise of pre-emptive rights held by MRN’s partners), Brazil Alumina refinery and Brazil Aluminium smelter, under the Transaction.
South32 has signed a binding conditional agreement (Agreement) to sell its aluminium value chain assets to Alcoa Corporation (Alcoa) for an implied enterprise value of up to US$5.6B (the Transaction). Alcoa will also assume related rehabilitation provisions of approximately US$1.2B.
Alcoa will acquire South32’s interests in Worsley Alumina (86%), Hillside Aluminium (100%), MRN bauxite mine (33%) (subject to exercise of pre-emptive rights held by MRN’s partners), Brazil Alumina refinery (36%) and Brazil Aluminium smelter (40%), under the Transaction.
Mozal Aluminium is excluded from the Transaction and remains on care and maintenance, with divestment under active consideration.
The Transaction’s implied enterprise value of up to US$5.6B comprises:
- US$3.1B in upfront cash consideration;
- US$1.0B in Alcoa shares, in the form of ~17.0M Alcoa shares at the 10-day volume weighted average price;
- ~US$750M in net debt and lease liabilities to be assumed by Alcoa; and
- up to US$750M in contingent cash consideration, linked to alumina and aluminium prices to 2030.
With this Transaction, Matt Daley has commenced as Chief Executive Officer and Managing Director of South32, effective today. This marks the completion of our previously announced CEO transition plan.
Graham Kerr will continue as a strategic advisor to support engagements related to the Transaction.
Graham Kerr, Inaugural South32 CEO said: “This Transaction will unlock significant value for shareholders and repositions South32 as a leading upstream base metals focused company with high-margin assets and transformational growth.
“The sale of our aluminium value chain assets to Alcoa for up to US$5.6B will deliver significant upfront proceeds while retaining upside to commodity price strength through price-linked consideration. This Transaction sees us unlock and capture our share of material synergies from combining our respective alumina businesses in Western Australia.
Matt Daley, South32 CEO, said: “Following completion, our portfolio will be focused on high-quality, long-life assets leveraged to attractive market fundamentals, with approximately 85% of pro-forma EBITDA from base and precious metals.
“From this strong platform, our peer leading, funded growth profile is expected to deliver approximately 55% production growth from our Taylor project and Sierra Gorda’s fourth grinding line expansion. Our deep pipeline of copper and zinc growth options in study and exploration phases provide additional upside.
“Our business will be simpler with a portfolio of higher margin upstream operations, reduced complexity and greater resilience. This will enable a leaner, lower cost operating model that will deliver ongoing value through an anticipated US$125M per annum reduction in overhead costs as new support structures are implemented.
“The Transaction further strengthens our balance sheet, enhancing our capacity to invest in high-returning growth projects and deliver shareholder returns. Following completion, an initial return of approximately US$500M will be delivered to South32 shareholders through an in-specie distribution of half the equity consideration received, as a fully-franked special dividend. Additional shareholder returns will be considered following completion.
“Under Alcoa’s ownership, the Assets will be part of a global aluminium value chain business. Together with Alcoa, we are committed to working closely with our people, communities, government and other stakeholders to support a successful ownership transition.”
See the full ASX announcement (.pdf)
Investor presentation (.pdf)