Alcoa, United States aluminium giant is buying off South Africa’s bauxite, alumina and aluminium business, in a deal worth up to $5.6 billion, in what is potentially Africa’s largest aluminium deal.
South32, Australian miner’s bauxite, alumina, and aluminium in South Africa is Africa’s largest aluminium smelting plant. Now the Australian miner is exiting the sector. The deal hands Alcoa control of Hillside Aluminium as U.S. companies race to acquire key industrial materials to rival China’s global metals supply dominance.
Under the transaction, Alcoa will pay $3.1 billion in cash, $1 billion in shares, assume $750 million in debt, and another $750 million if prices rise.
South32 is reshaping its portfolio to focus on energy transition commodities, while retaining its operations in manganese and exploration in the Southern Africa region.
The deal potentially knocks off Nigeria’s recent Africa alumina race with its planned $1.3 billion alumina refinery. In March this year, the Nigerian federal government signed a Memorandum of Understanding (MOU) with the African Finance Corporation (AFC) to jointly fund three strategic mining projects, including a $1.3 billion alumina refinery. Years back the country attempted an aluminium smelting business with the ALSCON plant at Ikot Abasi, Akwa Ibom State. The massive plant went through assets striping, cannibalisation and mismanagement leading to its present moribund state.
Under the Alcoa-Hillside Aluminium agreement, the Pittsburgh-based company will pay $3.1 billion in cash and about $1 billion in shares, while taking on about $750 million in debt and lease liabilities.
South32, the Australian miner, could receive a further $750 million if alumina and aluminium prices exceed agreed targets over the next four years.
The transaction when completed will give Alcoa full ownership of Hillside Aluminium, in South Africa, which is African continent’s largest aluminium smelter, while lifting its global share of equity-attributable bauxite production from 8.5 percent to 13 percent, putting it ahead of Rio Tinto.
Alcoa said in a statement on July 1 that the acquisition strengthens its aluminium supply chain, lifting its annual capacity to 3.2 million tonnes of aluminium and 14.8 million tonnes of alumina.
Noel Pillay, South32 Africa chief operating officer, said the agreement recognises long-term value and places it under a specialist aluminium producer.
“As a leading global producer of materials across the aluminium value chain, Alcoa is well positioned to operate Hillside into the future,” Pillay said.
He hoped that “The smelter will be operated by a dedicated aluminium producer, which will bring the benefits of its deep aluminium value chain experience to the region.”
Pillay said the Richards Bay operation had made a major contribution to South Africa over the past 30 years.
“It has made a major contribution to South Africa’s economy, employed thousands of local workers, and played a key role in supporting the downstream aluminium industry. We expect this contribution to continue under Alcoa’s ownership,” he said.T
The Alcoa deal also includes the ilde Bayside smelter property of Hillside Aluminium in Richards Bay, KwaZulu-Natal, South Africa. The Richards Bay operation is South Africa’s only primary aluminium smelter and Africa’s largest aluminium plant, with annual production of about 720,000 tonnes.
This now places Hillside Aluminium ahead of other major aluminium facilities on the continent, including Mozal Aluminium in Mozambique, Egypt aluminium’s Nag Hammadi smelter in Egypt and Ghana’s Valco.
Nigeria’s Alscon is certainly not in range.
Mozal, located about 20 kilometres west of Maputo, is Africa’s second-largest aluminium smelter, with capacity of up to 580,000 tonnes a year.
Egypt aluminium’s Nag Hammadi complex has current capacity of about 320,000 tonnes a year, while its proposed new 300,000-tonne-a-year smelter is not part of its current operating capacity.
The Alcoa deal also reshapes South32’s Southern African portfolio, which reduces the Australian miner’s exposure to aluminium, and now focusing more on commodities linked to the energy transition.
South32’s remaining Southern African business will now range from manganese operations in South Africa’s Northern Cape, and Botswana and Namibia where it runs exploration activities.
However, South32 continues its Mozal Aluminium smelter business in Mozambique which will remain under the seller’s ownership, after being placed on care and maintenance in March 2026 following failed talks over affordable power supply.
The Alcoa deal also leaves shareholders of South32 who are expected to own about 6 percent of Alcoa, the US producer.
