US company buys R92 billion rand factory in South Africa

• American aluminium producer Alcoa has agreed to acquire South32's aluminium business in a deal worth up to R92 billion
• The Hillside facility is the largest primary aluminium smelter in the Southern Hemisphere and supports thousands of jobs in KwaZulu-Natal through its operations and supply chain
• The acquisition is expected to strengthen Alcoa's global aluminium business while ensuring Hillside continues operating under a specialist producer, with the deal set to close in 2027 pending regulatory approval

American aluminium giant Alcoa has agreed to acquire South32's bauxite, alumina and aluminium business in a transaction worth up to R92 billion. The deal, announced this week, will see Alcoa take ownership of South Africa's Hillside aluminium smelter in Richards Bay, the largest primary aluminium smelter in the Southern Hemisphere. The transaction is expected to be completed during the first half of 2027, subject to regulatory approvals and other customary conditions.

The Hillside smelter is one of South Africa's most significant manufacturing facilities and has played a major role in the country's industrial sector for more than three decades. As South Africa's only primary aluminium smelter, the Richards Bay operation produces aluminium used across industries ranging from construction and automotive manufacturing to electricity infrastructure.

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Deal strengthens Alcoa's global aluminium business

The acquisition includes operations across Australia, Brazil and South Africa, allowing Alcoa to strengthen its presence throughout the aluminium production chain, from bauxite mining and alumina refining to aluminium smelting. The agreement excludes South32's idle Mozambican smelter, which remains under separate strategic review.

According to the companies, the transaction consists of approximately $3.1 billion in cash, $1 billion in Alcoa shares, while Alcoa will also assume around $750 million in debt and lease liabilities. South32 could receive a further $750 million if aluminium and alumina prices reach agreed performance targets over the next four years.

South32 says Hillside remains in experienced hands

South32 Africa Chief Operating Officer Noel Pillay said the agreement recognises the long-term value of the Hillside operation while ensuring it will continue being managed by a company with deep expertise in aluminium production. He said Hillside has made a significant contribution to South Africa's economy over the past 30 years by supporting local employment, creating economic opportunities and helping develop the country's downstream aluminium industry.

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Following the sale, South32's remaining Southern African operations will focus primarily on its manganese business in the Northern Cape, together with exploration activities in Botswana and Namibia. The announcement also marks the end of an era for South32, with long-serving Chief Executive Graham Kerr stepping down and Matthew Daley officially taking over as CEO from 1 July 2026.

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Source: Briefly News