18/01/2021 - 12:30

South32 awards $224m extension

18/01/2021 - 12:30

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Adbri will continue supplying lime to the Worsley Alumina refinery in WA after securing a five-year contract extension with the plant's majority owner, South32.

South32 awards $224m extension
Adbri will continue supplying lime to South32's Worsely Alumina plant for another five years. Photo: South32

South Australia's Adbri will continue supplying lime to the Worsley Alumina refinery in Western Australia after securing a five-year contract extension with the plant's majority owner, South32.

The extension, which will end in May 2029, is worth about $224 million and will bring Adbri’s relationship with the refinery to more than 40 years.

Chief executive Nick Miller said the extension demonstrated the strength of the Adbri's WA production and transport infrastructure assets.

“[The assets] enable us to a deliver a high-quality product offering that is competitive against imports,” he said.

“Our lime business remains uniquely positioned with operations and logistics capabilities strategically located to reliably supply customers in WA, SA and the Northern Territory.”

South32 holds an 86 per cent stake in Worsely, while Japan Alumina Associates owns 10 per cent and the Australian arm of Sojitz Resources 4 per cent.

Adbri, formerly Adelaide Brighton, is the country's largest lime manufacturer, with more than 1 million tonnes produced annually.

Its contract extension comes about six months after Alcoa of Australia ended a 50-year contract with Adbri’s Perth-based subsidiary, Cockburn Cement, which supplied about $70 million worth of lime to Alcoa each year.

Business News previously reported the contract loss would affect between 40 and 50 Cockburn Cement employees and contractors.

Shares in both Adbri and South32 were down by about 3.5 per cent at 3:16pm AEDT, to trade at $3 and $2.59, respectively.

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