South32 Receives Approval for Alumina Plant Extension: A Strategic Move for Future Growth

South32

South32, a leading Australia-based diversified metals producer, has secured federal government approval to extend the operational life of its Worsley alumina facility. The approval, granted on 12 February 2025, allows the plant to continue operations until 2036, a significant extension from its original end date in 2025. This move marks a strategic step in ensuring the company’s stable alumina production for years to come.

Key Approvals and Expansion Plans

The extension follows a positive decision from the Western Australian state government in December 2024, which granted approval with specific greenhouse gas and ecological conditions. The Worsley facility produces alumina from locally mined bauxite ore. South32 plans to expand its bauxite mining operations to maintain a consistent alumina production rate. By the end of the 2024-25 financial year, South32 expects its share of alumina production to reach 3.75 million tonnes (mn t).

Production Costs and Strategic Adjustments

Despite this positive development, the company has raised its Worsley production cost guidance by 5.2%, from $290 per tonne to $305 per tonne. The increase is primarily due to higher costs associated with purchasing caustic soda, a critical material used in the refining process. This price adjustment reflects the challenges faced in the operational environment, specifically rising material costs.

South32’s Broader Strategy and Challenges

The Worsley extension is part of a broader strategy as South32 navigates ongoing disruptions at its Mozambique-based Mozal Aluminium plant. Despite the expansion, the company has faced significant operational disruptions at Mozal, leading to the withdrawal of production guidance for the 2025 financial year. In contrast, the Worsley plant's stable and growing output positions South32 for continued success in the alumina market.

Previously, South32 expanded the Worsley facility in 2008, increasing its alumina production capacity from 3.25 million tonnes per year to its current level. With the latest extension approval, South32 reinforces its commitment to long-term production sustainability and market presence.