Alcoa has agreed to acquire key aluminium assets from Australian mining company South32 in a deal valued at approximately $4.85 billion, significantly expanding its position in the global aluminium industry.
Under the agreement, the US-based company will pay $3.1 billion in cash, approximately $1 billion in shares, and assume about $750 million in debt and lease obligations. South32 could also receive an additional $750 million if aluminium and alumina prices meet agreed performance targets over the next four years.
The acquisition will give Alcoa ownership of the Hillside Aluminium smelter in Richards Bay, South Africa—the largest aluminium smelter in Africa—while increasing the company’s share of global equity-attributable bauxite production from 8.5 percent to 13 percent, placing it ahead of one of its major global competitors.
A key asset in the transaction is the Hillside Aluminium facility, South Africa’s only primary aluminium smelter, which has an annual production capacity of around 720,000 tonnes. The deal also includes the inactive Bayside smelter property.
Hillside remains the continent’s largest aluminium production facility, surpassing other major plants in Mozambique, Egypt, and Ghana.
South32’s Chief Operating Officer for Africa, Noel Pillay, said the agreement reflects the long-term value of the Hillside operation and places it under the management of a company with extensive expertise across the aluminium value chain.
He noted that the smelter has played a vital role in South Africa’s economy over the past three decades by creating thousands of jobs and supporting the country’s downstream aluminium industry, expressing confidence that its contribution will continue under Alcoa’s ownership.
The sale forms part of South32’s broader strategy to reshape its business portfolio by reducing its exposure to aluminium and focusing more on minerals linked to the global energy transition.
Following completion of the transaction, South32 will retain its manganese operations in South Africa’s Northern Cape, along with exploration projects in Botswana and Namibia.
The company’s Mozal Aluminium smelter in Mozambique is not included in the deal and will remain under South32’s ownership after it was placed on care and maintenance earlier this year due to unresolved electricity supply challenges.
Upon completion, South32 shareholders are expected to hold approximately six percent of Alcoa’s shares.
For Alcoa, the acquisition is expected to strengthen its global aluminium supply chain, increasing annual production capacity to about 3.2 million tonnes of aluminium and 14.8 million tonnes of alumina as competition intensifies for critical industrial materials.
