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January 6, 2022updated 07 Jan 2022 6:34am

South32 and Alcoa to resume production at Brazilian aluminium smelter

The partners plan to invest $175m to restart operations at the smelter, which was placed on care and maintenance since 2015.

By Archana Rani

South32 and its joint venture (JV) partner Alcoa are planning to restart production from the Alumar aluminium smelter in Brazil using 100% renewable energy.

The partners are planning to invest $175m to restart the smelter, called Brazil Aluminium, according to the Australian Financial Review (AFR).

The refinery was placed on care and maintenance since 2015 due to low aluminium prices and increased power costs.

Through its wholly owned unit Alcoa Alumínio, Alcoa owns a 60% stake in the smelting and casting capacity while the remaining 40% is held by South32.

South32 plans to invest its share of $70m in the project during FY22 and FY23 to support the restart activity. The project is planned to start production in the June quarter of 2022.

The smelter will feature three potlines, which will have a total operating capacity of 447,000 metric tonnes. This capacity is expected to be achieved in March 2023.

South32 CEO Graham Kerr said: “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.

“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.”

The smelter will receive alumina feed from the co-located Brazil Alumina refinery, which is 36% owned by Australian mining company South32.

Last October, South32 agreed to acquire a 45% stake in the Sierra Gorda copper mine in Chile for $2.05bn.

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