South32 and partner Alcoa Corporation will restart their Brazil-based Alumar aluminium smelter (Brazil Aluminium), which will be powered 100% by renewable energy, placing it in the second quartile of the global aluminium site cost curve.
First production is expected in the June 2022 quarter, with full capacity from the smelter’s three potlines of 447 000 tpa (100%) to be achieved in the March 2023 quarter. Once at full capacity South32’s wide annualised equity share of aluminium production is expected to lift by 16% (or 179 000 t) to 1 269 000 t.
With the smelter’s energy requirements secured under long term contracts, the alumina supply will be sourced from the co-located Brazil Alumina refinery (36% South32 share), offering substantial efficiencies.
Brazil Aluminium has been on care and maintenance since 2015. South32 expects to invest ~US$70 million (40% South32 share) across FY22 and FY23 to support the smelter’s restart, including ~US$10 million in capital expenditure.
“We are excited to participate in the restart of the Alumar smelter using 100% renewable power. 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,” says South32 CEO Graham Kerr.
“We see strong long-term market fundamentals for aluminium. 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.
“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.”
About Brazil Alumina and Brazil Aluminium
Brazil Alumina comprises South32’s 14.8% interest in the Mineração Rio do Norte (MRN) bauxite mine and our 36% interest in the Alumar alumina refinery. Brazil Aluminium comprises South32’s interest in the Alumar aluminium smelter (40%). The MRN mine is located in the Trombetas region in the state of Pará, Brazil. The Alumar alumina refinery and Alumar aluminium smelter are located at São Luís in the state of Maranhão, Brazil.
