Brazil Alumina comprises South32’s 14.8% interest in the Mineração Rio do Norte (MRN) bauxite mine and our 36% interest in the Alumar alumina refinery
South32 to participate in a restart of the Alumar aluminium smelter. (Credit: Khusen Rustamov from Pixabay.)
South32 Limited (ASX, LSE, JSE: S32; ADR: SOUHY) (South32) is pleased to announce our decision to participate in a restart of the Alumar aluminium smelter (Brazil Aluminium), together with our joint venture partner Alcoa Corporation (Alcoa). First production is expected in the June 2022 quarter, with full capacity from the smelter’s three potlines of 447ktpa (100%) to be achieved in the March 2023 quarter1. Once at full capacity our Group wide annualised equity share of aluminium production is expected to lift by 16% (or 179kt) to 1,269kt2.
South32’s 40% share of Brazil Aluminium will be powered by 100% cost efficient renewable power, placing the smelter in the second quartile of the global aluminium site cost curve3. With our energy requirements secured under long term contracts, our alumina supply will be sourced from the co-located Brazil Alumina refinery (36% South32 share), offering substantial efficiencies.
Brazil Aluminium has been on care and maintenance since 2015. We expect to invest ~US$70M (40% South32 share) across FY22 and FY23 to support the smelter’s restart, including ~US$10M in capital expenditure.
South32 Chief Executive Officer, Graham Kerr said “We are excited to participate in the restart of the Alumar smelter using 100% renewable power. With the smelter benefitting from existing infrastructure, access to our own supply of alumina and long-term green energy sources, we expect our investment to deliver strong returns through the cycle.
“We see strong long-term market fundamentals for aluminium. By investing along our existing alumina-aluminium value chain with the smelter’s restart and the expected increase to our shareholding in Mozal Aluminium, we are further integrating our business and meaningfully increasing our share of metal produced utilising green energy.
“With this decision we continue to make substantial progress in reshaping our portfolio, increasing our exposure to the base metals required for the critical transition to a low carbon future.”
Source: Company Press Release