What's Happening?
South32 reported a 1% increase in aluminium production at its Hillside smelter in South Africa, reaching 181,000 tons in the last quarter. The smelter is testing its maximum technical capacity, with production guidance for the 2026 financial year remaining
at 720,000 tons. Meanwhile, manganese production decreased by 7% due to underground development at the Wessels mine. South32's Mozal Aluminium in Mozambique also saw a 3% production increase, operating near maximum capacity. However, future operations are uncertain due to potential electricity supply issues beyond March 2026. South32 is negotiating with the Mozambique government and other entities to secure electricity supply.
Why It's Important?
The steady production at Hillside and Mozal smelters is crucial for South32's operational stability and financial health. Aluminium is a key material in various industries, including automotive and construction, and maintaining production levels ensures supply chain continuity. The potential electricity supply issue at Mozal highlights the challenges faced by industries reliant on stable energy sources. Resolving these issues is vital for South32 to continue operations and avoid placing the smelter on care and maintenance, which would impact production and revenue.
What's Next?
South32's ongoing negotiations to secure electricity for Mozal will be critical in determining the smelter's future operations. If successful, it will ensure continued production and financial stability. The company may also explore alternative energy sources or partnerships to mitigate future supply risks. Additionally, South32's focus on climate resilience and emissions reduction could lead to investments in sustainable energy solutions, aligning with global trends towards greener industrial practices.
