South32 sees strong first half earnings growth while preparing for Mozal shutdown

South 32 generated strong first half earnings growth after higher metals prices boosted a stable operating performance, while Mozal Aluminium in Mozambique is being put into care and maintenance.

Underlying earnings before interest tax depreciation and amortisation (Ebitda) increased 9% to $1.1 billion and underlying earnings were 16% up at $435 million. Attributable profit was up 29% to $464m. Full-year production and operating unit cost guidance remained unchanged across the operated businesses, in line with the group's focus on safe and reliable operating performance.

Mozal Aluminium is being transitioned to care and maintenance in March 2026 due to the inability to secure sufficient and affordable electricity supply. "We are working closely with our people and stakeholders through this change," said South 32's CEO Graham Kerr.

The group had first announced their intention to shut the plant in December 2025. An online search showed Mozal Aluminium is one of Mozambique's biggest industrial employers, with about 2 000 people directly employed and approximately the same number employed as contractors.

Hillside Aluminium, which operates in Richards Bay, South Africa, saw saleable production unchanged at 362kt in the first half, as the smelter continued to test its maximum technical capacity. Full year production guidance was unchanged at 720kt.

Brazil Aluminium's saleable production increased by 16% to 74kt, but production in the second quarter was below plan due to unplanned pot outages and external energy disruptions. Full year production guidance was revised lower to 135kt from 160kt.

South 32's underlying Ebitda from its aluminium operations increased sharply by $115m to $251m, reflecting a 6% increase in average realised price of aluminium and lower alumina input prices at Hillside Aluminium and Brazil Aluminium.

The group's South Africa manganese production fell 2% to 1 057kwmt, as the operation completed maintenance and underground development at Wessels. Underlying Ebitda from the operations decreased by $20m to $8m, due to lower average realised manganese prices.

"We're continuing work to grow our base metals production and unlock value across multiple development horizons," Kerr said.

At Hermosa, construction of the large-scale, Taylor zinc-lead-silver project advanced. Work continued to unlock value from Hermosa's broader land package, while further positive exploration drilling results were received from the Peake copper deposit.

"At Cannington (located in Queensland Australia), we have today announced a 28 percent increase in the underground ore reserve, while also targeting further potential growth through both underground and open pit development options," said Kerr.

Sierra Gorda Mine in northern Chile progressed options to grow future copper production, advancing studies for the fourth grinding line project, and defined an exploration target at Catabela Northeast, which highlighted the potential for future mine life extension.

The group announced an unchanged interim ordinary dividend of US 3.9 cents per share. Operational greenhouse gas (GHG) emissions increased by 16%, reflecting an increased reliance on coal-fired electricity at Mozal Aluminium, due to reduced hydroelectric power supply following drought conditions in Mozambique.

Reflecting a strong financial position and positive outlook for the group, the capital management program was increased by $100m to $2.6bn, with $209m remaining to be returned to shareholders.

Kerr said they expect to continue the positive momentum in the group into the second half. South32's share price slipped 2.55% to R54.49 on the JSE Thursday afternoon. A year ago the share was trading at R42.45.

BUSINESS REPORT