South32 to sell most of its aluminium assets to Alcoa Corporation for up to $5.6bn

Diversified miner South32 has signed a binding conditional agreement to sell its aluminium value chain assets, including its interest in Worsley Alumina, in Australia, and Hillside Aluminium, in South Africa, to NYSE- and ASX-listed Alcoa Corporation for up to $5.6-billion.

South32's Mozal Aluminium operation, in Mozambique, is, however, excluded from the transaction. The operation remains on care and maintenance, with divestment under "active consideration".

Graham Kerr, who stepped down as South32 CEO with effect from June 30, says the transaction with Alcoa will unlock significant value for shareholders and reposition South32 as a leading upstream base metals-focused company with high-margin assets and transformational growth.

“The sale of our aluminium value chain assets to Alcoa for up to $5.6-billion will deliver significant upfront proceeds while retaining upside to commodity price strength through price-linked consideration.

“This transaction sees us unlock and capture our share of material synergies from combining our respective alumina businesses in Western Australia.”