South32, Alcoa to restart smelting in Brazil using renewable energy

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South32, Alcoa to restart smelting in Brazil using renewable energy

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South32 Limited, ASX:S32; metals and mining stocks, renewable energy use, ASX
Image source: © Paha_l | Megapixl.com

Highlights

  • ASX:S32 to restart Aluminium smelting work with Alcoa Corporation in Brazil.
  • South32’s Brazil operations will be powered 100% by renewable power.
  • S32 to invest US$70M across FY22 and FY23 to support the smelter’s restart.

Metals and mining company, South32 Limited (ASX:S32) shared plans to move to renewable energy powered Aluminium smelting in Brazil.

How is S32 planning to restart operations in Brazil?

  • South32 has decided to participate in restart of Alumar aluminium smelter in Brazil, with its joint venture partner Alcoa Corporation.
  • The first production is expected by June 2022 quarter, and smelter is to work on full capacity from March 2023.
  • However, South32’s 40% share of Brazil Aluminium shall now powered 100% by renewable energy.
  • For this S32 is to invest US$70 million across FY22 and FY23, including US$10 million as capital expenditure.
  • According to the mining company’s management-

Data Source- ASX release of South32 Limited on 6 January, 2022 

  • As stated in the ASX release, S32 wants to transition to a low carbon future with this decision.

The US$10 million of capital expenditure involved in restarting the operations seems to be taking a toll on share price today. The stock was spotted trading 0.747% lower at AU$3.990 per share at 12:33 PM AEDT. 

Bottom line -

S32 share price has fallen on ASX today. The negative reaction seems to be a result of the increased expenditure for restart of smelting work in Brazil. However, S32 believes this will take it to a low carbon future. The results of S32’s decision will be thus become clearer with time.

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