Global Trade
July 1, 2026
Alcoa agrees to acquire South32 aluminum assets, expanding its upstream footprint
Written by Nicholas Bell
Alcoa has agreed to acquire South32’s bauxite, alumina and aluminum assets for an implied enterprise value of up to $5.6 billion, adding major operations in Australia, Brazil and South Africa.
The binding agreement covers South32’s 86% interest in the Worsley Alumina joint venture in Western Australia, including the Boddington bauxite mine, 100% of the Hillside Aluminium smelter in South Africa, a 33% interest in the Mineração Rio do Norte (MRN) bauxite mine in Brazil, a 36% interest in the Alumar alumina refinery and a 40% interest in the Alumar aluminum smelter.
Mozal Aluminium in Mozambique is excluded from the transaction and remains on care and maintenance.
The consideration includes $3.1 billion in cash, about $1 billion in newly issued Alcoa shares, about $750 million of assumed net debt and lease liabilities, and up to $750 million in contingent cash payments tied to alumina and aluminum prices through 2030. Alcoa will also assume about $1.2 billion of rehabilitation liabilities.
The companies expect the deal to close during the first half of 2027, subject to South32 shareholder approval and regulatory clearances.
The acquisition increases Alcoa’s ownership of operations where it already has an operating footprint in Australia and Brazil while adding Hillside, its first operating aluminum smelter in South Africa.
Assets acquired
Australia
In Western Australia, Alcoa will add South32’s interest in Worsley Alumina, whose bauxite is mined near Boddington before moving by conveyor to the refinery near Collie and then by rail to Bunbury for export. Worsley supplied alumina to South32’s Hillside and Mozal smelters before Mozal was placed on care and maintenance.
According to estimates by CRU Group, Worsley is Australia’s largest alumina refinery by nameplate capacity, while the Boddington mine ranks among the country’s largest bauxite operations.
Huntly, which Alcoa already owns, remains Australia’s largest bauxite mine by nameplate capacity.
The transaction would place Worsley alongside Alcoa’s existing Huntly and Willowdale bauxite mines in Western Australia and the Kwinana, Pinjarra, and Wagerup alumina refineries in the region.
Brazil
South32’s interest in Brazil includes one-third of the MRN bauxite mine, a 36% share of the Alumar alumina refinery and a 40% interest in the Alumar aluminum smelter. Alcoa already owns the remaining 60% of the aluminum smelter and operates the integrated complex.
CRU estimates identify MRN as Brazil’s largest bauxite mine by nameplate capacity and Alumar as the country’s second-largest alumina refinery after Alunorte.
The Alumar aluminum smelter restarted during fiscal 2022 after several years on care and maintenance. The smelter’s power contract extends through 2038. During fiscal 2025, Alumar produced 138,000 metric tons of primary aluminum, according to South32.
South Africa
The Hillside Aluminium smelter produced 718,000 metric tons during fiscal 2025 and remains the largest primary aluminum smelter in Africa and the Southern Hemisphere, according to South32 and CRU data.
The facility primarily produces ingot and liquid metal and receives most of its alumina feed from Worsley, linking two of the assets included in the transaction.
During Alcoa’s investor call, Chief Executive Officer Bill Oplinger said Hillside uses the same AP30 smelting technology deployed elsewhere within Alcoa’s portfolio despite representing a new operating geography for the company. He also said the facility’s power contract extends through 2031.
Alcoa’s rationale
Alcoa said the acquisition would increase its pro forma alumina production from 9.6 million metric tons to 14.8 million metric tons and aluminum production from 2.3 million metric tons to 3.2 million metric tons based on 2025 production.
On a pro forma basis, Alcoa said third-party revenue would increase about 28%, EBITDA about 45%, alumina production 53% and aluminum production about 37% using 2025 results.
Oplinger said the transaction values acquired aluminum smelting capacity at roughly $1,850 per metric ton and alumina refining capacity at about $600 per metric ton.
He compared those figures with estimated replacement costs of roughly $7,000 to $8,0000 per metric ton for new aluminum smelting capacity and $1,500 to $2,000 per metric ton for new alumina refining capacity in Western markets.
Oplinger also added both acquisition metrics were below what Chinese companies are currently spending to build aluminum smelting and alumina refining capacity in Indonesia, where Chinese producers are building a significant share of new global aluminum capacity.
South32’s rationale
For South32, the transaction continues a broader portfolio shift away from aluminum and toward copper, zinc and other base and precious metals.
The company said the sale will simplify its operating portfolio and reduce annual overhead costs by an expected $125 million once transition services conclude. Following completion, South32 expects about 85% of tis pro forma EBITDA to come from copper, zinc, silver and lead operations.
South32 shareholders are expected to vote on the transaction at the company’s annual general meeting later this year. According to Alcoa, the issuance of approximately 17 million new shares represents about 6% of its outstanding share count and does not require an Alcoa shareholder vote.
