SOUTH32, the global metals producer, is pulling out all stops to take advantage of aluminium prices at four-year highs, even as the Middle East conflict pushes up input costs.
As a result of the disruption to shipping and Middle East aluminium smelters, the three-month aluminium price quoted on the LME is currently at a four-year high of $3,557/t.
South32 said in its March quarter production report that its Hillside aluminium smelter in South Africa was testing its maximum technical capacity, despite the impact of load shedding. However, it produced 3% less at 176,000t in the March quarter than in the December quarter, and sales slipped by 16% as a shipment was pushed back into the June quarter.
The group’s Mozal smelter in Mozambique, which was a significant aluminium producer, was placed on care and maintenance on 15 March because South32 could not secure an affordable electricity tariff. As Mozal winds down, its saleable production fell by 28% quarter on quarter to 65,000t. It will draw down its remaining inventory in the June quarter.
Output from Brazil Aluminium was lower due to pot outages and electricity disruptions experienced in December, but operations have become more stable and it is currently ahead of production guidance.
South32’s two alumina operations, Worsley Alumina in Australia and Brazil Alumina, are both experiencing cost pressures due to market conditions, higher global freight rates and rising caustic soda prices caused by the Middle East conflict.
Production from South32’s manganese operation in South Africa was flat at 500,000wmt. It has been undergoing maintenance in the past two quarters, but this is now completed.
South32’s outgoing CEO, Graham Kerr, said the group was maintaining its previous production guidance for all operations except Australia Manganese, which was dealing with higher water levels.
The group is continuing to invest the bulk of its capex in growing its copper, zinc and silver output. It spent US$496 million on its Hermosa project in the US in the nine months to end-March. In the second half of 2026, it expects to secure the Final Record of Decision from the US Forest Service for the project, which would enable it to build the necessary infrastructure.
