06/01/2022 - 11:46

South32 revives Brazil Aluminium

06/01/2022 - 11:46

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South32 and Alcoa will restart production at the Brazil Aluminium operation, with first output slated for the June quarter after a six-year hiatus.

South32 revives Brazil Aluminium
South32 chief executive Graham Kerr says he sees long-term market fundamentals for aluminium.

South32 and Alcoa will restart production at the Brazil Aluminium operation, with first output slated for the June quarter after a six-year hiatus.

The joint venture partners announced they would be spending $US70 million ($A97.1 million) over FY22 and FY23 to restart the smelter.

Alcoa, as operator, suspended its Brazillian aluminium production in 2015 in a bid to mitigate losses, with the project under care and maintenance since, but did maintain its mining and alumina production.

Upon restart, South32 says, it will power its 40 per cent portion of the operation with 100 per cent renewable power secured under long-term contracts.

Broadly, the move aligns with the company’s shift to shrink its exposure to carbon-intensive resources.  

South32 chief executive Graham Kerr said the company was banking on long-term market fundamentals for aluminium.

“We are excited to participate in the restart of the Alumar smelter using 100 per cent renewable power,” Mr Kerr said in a statement.

“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.”

The company also flagged plans to lift its existing 47.1 per cent stake in Mozal Aluminium, which includes aluminum smelter and transport infrastructure situated west of Mozambique’s capital city, Maputo.

First production is slated for the June quarter this year and to hit full capacity of 447 kilotonnes per annum in the March 2023 quarter.

South32 estimates the move will lift group annual aluminium production by 16 per cent.

Brazil Alumina comprises South32’s 14.8 per cent interest in the Mineração Rio do Norte (MRN) bauxite mine and its 36 per cent interest in the Alumar alumina refinery.

Brazil Aluminium comprises South32’s interest in the Alumar aluminium smelter, totalling 40 per cent.

South32 shares are down 0.5 per cent to trade at $4.

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