How Does South32 Company Work?

South32's primary products include alumina, aluminium, copper, silver, lead, zinc, nickel, metallurgical coal, and manganese. These commodities are sourced from mines and smelters strategically located across Australia, Southern Africa, and South America.

The company's operations are bolstered by a strong supply chain and key strategic alliances. For example, its copper output relies on the Sierra Gorda joint venture in Chile, which in FY25 exceeded production targets by 4% and generated US$176 million in distributions.

South32's aluminium assets in Brazil and Mozal are operating at near-full capacity. The Mozal facility demonstrated resilience, achieving a 13% year-on-year increase in production for FY25 despite facing civil unrest.

Sustainable practices and effective resource management are integral to South32's operational ethos, as detailed in its 2024 Sustainable Development Report. This commitment guides how South32 manages its mining operations.

In the first half of FY25, South32 completed the divestment of its Illawarra Metallurgical Coal operations. Further demonstrating this strategic shift, an agreement was reached in July 2025 to divest the Cerro Matoso nickel operation. These actions are central to South32's strategy to reduce capital intensity and focus on commodities essential for the global energy transition.

FY25 saw a significant 20% year-on-year increase in copper production, surpassing guidance by 2%, largely due to strong performance at the Sierra Gorda joint venture. Aluminium production also grew by 6% in FY25, with key assets nearing full capacity. The company allocated US$517 million to its Hermosa project in FY25, advancing zinc-lead-silver and manganese deposits crucial for future base metals output.

Despite disruptions from Tropical Cyclone Megan impacting Australia Manganese operations and civil unrest affecting Mozal Aluminium, South32 demonstrated resilience. Australia Manganese resumed export shipments, and Mozal Aluminium achieved a 13% year-on-year production increase in FY25. An impairment expense of US$264 million was recognized at the Cerro Matoso nickel refinery, reflecting market shifts.

South32's competitive edge is built on a diversified portfolio of quality assets, a strategic focus on decarbonization-enabling metals, and a robust balance sheet. Its agility in portfolio management, coupled with disciplined capital allocation, allows for self-funded growth and shareholder returns. The company is actively investing in projects like Hermosa and exploring new copper systems to capitalize on the energy transition.

South32 is a key player in the global mining and metals industry, particularly in future-facing commodities like aluminium, manganese, and copper. These materials are essential for the ongoing energy transition, and some are even listed on Australia's Strategic Minerals List. The company's diversified portfolio underpins its market standing.

Analysts generally hold a positive view of South32, with a consensus recommendation to buy its shares. Strong earnings growth of 69% over the next two years and nearly 30% dividend growth are forecast. Goldman Sachs, for example, expects sales to reach AUD6 billion in 2025, highlighting the company's financial trajectory.

Despite its strong position, South32 faces several risks, including commodity price volatility, particularly for aluminium and manganese in 2024. Geopolitical tensions add to global uncertainty. Operational disruptions, such as those caused by Tropical Cyclone Megan on Australia Manganese and civil unrest affecting Mozal Aluminium, also pose challenges.

A significant operational risk for Mozal Aluminium is the ongoing electricity supply negotiations, with the current contract set to expire in March 2026. Failure to secure a new agreement could lead to a production halt. Additionally, the company noted a 19% increase in its lost time injury frequency in the 2024 financial year, indicating a need for continued safety improvements.