South32 agrees to sell WA alumina assets to Alcoa in deal worth up to $5.6bn

South32 has agreed to sell its alumina, bauxite and aluminium assets in Australia, Brazil and South Africa to Alcoa in a transaction worth up to $5.6 billion, the companies said.

The deal gives Alcoa a larger footprint in Western Australia and broadens its upstream aluminium base across three continents, while South32 moves further out of the aluminium value chain and toward base metals.

Under the agreement, South32 will receive $3.1 billion in cash, about $1 billion in Alcoa shares and up to $750 million in contingent payments linked to commodity prices. South32 said Alcoa will also assume about $750 million in net debt and lease liabilities.

The companies said the transaction is expected to close in the first half of 2027, subject to regulatory and shareholder approvals.

What Alcoa is buying

The package includes South32’s Western Australian bauxite and alumina operations, the Hillside aluminium smelter in South Africa and South32’s stakes in Brazilian aluminium-related assets.

It does not include South32’s Mozal aluminium smelter in Mozambique. That asset remains outside the sale, even as the broader agreement reshapes ownership of major aluminium supply assets across Australia, South Africa and Brazil.

Alcoa said the assets are a strong strategic fit and would strengthen its upstream aluminium position. Financial Times reporting said the deal could lift Alcoa’s alumina production by more than 50% and smelting capacity by more than a third, with expected synergies of about $900 million.

Why South32 is selling

South32 said the divestment will help it refocus on higher-margin base metals. The Perth-based miner was spun out of BHP in 2015 and has been shifting attention toward copper, zinc, silver and lead, including growth projects in the Americas.

The sale marks a major step in that repositioning. It also removes most of South32’s aluminium exposure, leaving the company more concentrated on commodities where it sees stronger long-term returns.

Timing, approvals and reaction

The companies said the deal still needs approval from regulators in Australia and South Africa, as well as from South32 shareholders. That keeps the transaction exposed to possible conditions or changes before closing.

Market reaction was mixed after the announcement, with reports saying Alcoa shares fell while South32 shares rose. Alcoa chief executive William F. Oplinger said the overseas assets have strong operating histories.

The transaction also has wider implications for Western Australia, where Alcoa already operates nearby aluminium assets. The deal could affect local operating plans, investment priorities and employment decisions, even though those details have not yet been fully set out.

South32 and Alcoa have not yet given detailed guidance on how the Alcoa shares will be distributed or on next steps for assets that remain outside the sale, including Mozal.

The agreement is one of the biggest aluminium industry combinations in recent years and reflects a broader consolidation move as producers seek scale, cost efficiencies and tighter portfolio focus.