For thirty years, the Hillside smelter in Richards Bay has quietly turned electricity into metal, employing thousands and anchoring South Africa's aluminium industry. Now it is changing hands. South32, the Australian mining group that has run Hillside since splitting from BHP in 2015, has agreed to sell almost its entire aluminium business to the American producer Alcoa.
What's in the deal
The agreement values the assets at up to $5.6 billion, roughly R92 billion. Alcoa is paying $3.1 billion in cash upfront, about $1 billion in its own shares, taking on around $750 million of debt, and promising up to another $750 million if aluminium and alumina prices climb over the coming years. It is also assuming about $1.2 billion in future rehabilitation costs. Beyond Hillside, the only primary aluminium smelter in the country and the largest in the southern hemisphere, the package includes South32's alumina and bauxite interests in Australia and Brazil, while its idled Mozal smelter in Mozambique is left out. For Alcoa, the purchase lifts annual output to 3.2 million tonnes of aluminium and 14.8 million tonnes of alumina, with an expected $900 million in value from running the assets more efficiently. "We're bringing together highly complementary assets," said Alcoa chief executive Bill Oplinger, adding that the deal should add to cash flow immediately. For South32 it is a clean exit from a volatile, power-hungry business: new boss Matt Daley, who took over the same day, says the group will refocus on higher-margin base and precious metals and hand shareholders an initial return of about $500 million.
Why it matters for South Africa
Hillside supports thousands of jobs in KwaZulu-Natal, directly and through its supply chain, so the key question is what a new owner does with it. South32's Africa boss, Noel Pillay, says Alcoa, as a dedicated aluminium producer, is "well positioned to operate Hillside into the future." Investors liked the move, sending South32's shares up as much as 10%. The deal still needs shareholder and regulatory approval and is only expected to close in the first half of 2027, which leaves South Africa's competition authorities a long runway to weigh what it means for jobs and a strategic industry.
