South32’s revenue grows by 1% and profit surges by fivefold

South32’s recent results come on the heels of impressive performances from miners benefiting from elevated commodity prices and improved margins.

The diversified Australian miner’s results for the year ending June 2026 reveal a nearly 42% rise in its realized copper price, while realized silver prices have more than doubled.

The stock rose approximately 2% on the JSE following the results announcement and has seen a nearly 14% increase over the last 30 days.

The increase in copper and silver prices directly impacted margins, boosting the operating margin for South32’s copper division from 58% to 66% and for its zinc-lead-silver operations from 43% to 53%.

The group margin expanded nearly five percentage points to 31%.

Even though statutory revenue from continuing operations rose only 1% to $5.8 billion, attributable profit surged more than fivefold to $1.09 billion, up from $213 million the previous year.

Including revenue from equity-accounted investments, total revenue grew by 7% to $8.1 billion.

A significant portion of the profit growth stemmed from increased margins, higher commodity prices, the recovery of its Australian manganese operations, and the elimination of the substantial impairment charges that burdened the previous year’s results.

Aluminium Exit

South32 reported $464 million in non-financial asset impairments in FY2025, including an approximately $372 million write-down of Mozal Aluminium after failing to secure commercially viable electricity past March 2026.

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US giant Alcoa in $5.6bn South32 deal

Hillside aluminium smelter, SA’s largest power consumer, gets a new owner

The company has since finalized an agreement to sell most of its aluminium business, including the Hillside smelter in Richards Bay and its operations in Brazil and Australia, to US producer Alcoa for up to $5.6 billion.

Mozal, located in Mozambique, is not included in this transaction and will remain on care and maintenance while South32 explores a separate sale.

The divestiture will eliminate capital- and energy-heavy aluminium and bauxite operations from the company’s portfolio, allowing South32 to focus predominantly on base metals such as copper, zinc, lead, silver, and manganese.

This move will also strengthen South32’s balance sheet and assist in funding its base-metals project pipeline.

Post-transaction, the group anticipates having a pro forma net cash position of around $3.5 billion, along with Alcoa shares as part of the payment.

“The sale of our aluminium value-chain assets to Alcoa will simplify and enhance our portfolio, positioning South32 as a leading base-metals-focused company with high-margin producing assets and a pipeline of attractive growth opportunities in copper, zinc, and silver,” stated newly appointed CEO Matt Daley.

SA Footprint

Once the deal is finalized, South32’s operational footprint in South Africa will be limited to its interests in the Mamatwan open-pit and Wessels underground manganese mines in the Northern Cape.

The group divested its South African coal assets to Seriti in 2021 due to years of inadequate returns, which included a loss-making Eskom supply contract, significant rehabilitation liabilities, and ongoing capital needs.

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South32 idles Mozambique aluminium smelter

The centerpiece of its growth strategy is the Hermosa project in Arizona, where it invested $711 million in the Taylor zinc-lead-silver mine, expected to begin production in late 2028.

An additional $1 billion in growth expenditure is planned for 2027.

Copper Expansion

At the 45%-owned Sierra Gorda copper mine in Chile, the ore reserve increased by 61% to 1.1 billion tonnes. The partners have also approved a fourth grinding line, anticipated to boost copper-equivalent production by approximately 30% from 2031.

Free cash flow rose by 136% to $610 million despite significant investments in Hermosa.

A final dividend of 5.4 US cents per share brings the total annual dividend to 9.3 cents, reflecting a 55% increase.

The South African manganese division faced challenges, with rising diesel costs and a stronger rand impacting its operating margin, which decreased from 13% to 8%.

“Looking forward, the outlook for our business is encouraging as we concentrate on safe and stable operations while increasing our production of base metals in structurally favorable markets,” remarked Daley.