SOUTH32 is to restart production at its Alumar aluminium smelter in Brazil which will be 100% supplied with renewable power, the group said today.
As a result, the smelter would be in the second quartile of the global aluminium site cost curve assisted by sourcing of alumina from the co-located Brazil Alumina refinery in which South32 has a 36% share.
First production is expected in June with full capacity of 447,000 tons due to be reached in the March 2023 quarter. Once at full capacity, South32 will have an annualised equity share of aluminium production of 1.27 million tons, a 16% lift on last year.
Brazil Aluminium, South32’s joint venture with Alcoa Corporation that owns Alumar, has been on care and maintenance since 2015. South32 will invest $70m, representing its 40% share in the joint venture, in the restart in its 2022 and 2023 financial years.
“With the smelter benefitting from existing infrastructure, access to our own supply of alumina and long-term green energy sources, we expect our investment to deliver strong returns through the cycle,” said Graham Kerr, CEO of South32.
“We see strong long-term market fundamentals for aluminium,” he said. “By investing along our existing alumina-aluminium value chain with the smelter’s restart and the expected increase to our shareholding in Mozal Aluminium, we are further integrating our business and meaningfully increasing our share of metal produced utilising green energy.”
In September, South32 said it would increase its stake in the Mozal aluminium facilities in Mozambique to 72.1% after exercising its pre-emptive rights at a cost of $250m.
“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,” said Kerr of the Alumar restart.