South32 turns 1% revenue growth into fivefold profit surge
3 min readSouth32’s latest results follow a run of bumper performances from miners benefitting from higher commodity prices and fatter margins.
The Australian diversified miner’s results for the year to June 2026 show a nearly 42% increase in its realised copper price, while realised silver prices more than doubled.
The share was up about 2% on the JSE following publication of the results and has gained nearly 14% over the past 30 days.
The surge in copper and silver prices fed directly into margins, lifting the operating margin at South32’s copper business from 58% to 66% and at its zinc-lead-silver operations from 43% to 53%.
The group margin widened nearly five percentage points to 31%.
Despite statutory revenue from continuing operations growing just 1% to $5.8 billion, attributable profit rose more than fivefold to $1.09 billion, from $213 million the previous year.
Including equity-accounted investments, revenue grew 7% to $8.1 billion.
Much of the profit growth came from wider margins and higher commodity prices, the recovery of its Australia manganese operations, and the absence of the heavy impairment charges that depressed the prior-year result.
Aluminium exit
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South32 recognised $464 million in non-financial asset impairments in FY2025, including a roughly $372 million write-down of Mozal Aluminium after failing to secure commercially viable electricity beyond March 2026.
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The group has since agreed to sell most of its aluminium business – including the Hillside smelter in Richards Bay and its operations in Brazil and Australia – to US producer Alcoa for up to $5.6 billion.
Mozal, in Mozambique, is excluded from the transaction and remains on care and maintenance while South32 considers a separate sale.
The disposal will remove capital- and energy-intensive aluminium and bauxite operations from the portfolio, leaving South32 as a predominantly base-metals producer focused on copper, zinc, lead, silver and manganese.
It will also strengthen South32’s balance sheet and help fund its pipeline of base-metals projects.
The group expects to have pro forma net cash of about $3.5 billion after the transaction, in addition to the Alcoa shares it will receive as part payment.
“The sale of our aluminium value-chain assets to Alcoa will simplify and strengthen our portfolio, positioning South32 as a leading base-metals-focused company with high-margin producing assets and a pipeline of compelling growth options in copper, zinc and silver,” said newly appointed CEO Matt Daley.
SA footprint
Once the transaction is completed, South32’s producing footprint in South Africa will be confined to its interests in the Mamatwan open-pit and Wessels underground manganese mines in the Northern Cape.
The group sold its South African coal assets to Seriti in 2021 after years of weak returns, including a loss-making Eskom supply contract, significant rehabilitation liabilities, and ongoing capital requirements.
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The centrepiece of its growth strategy is the Hermosa project in Arizona, where it invested $711 million during the year in the Taylor zinc-lead-silver mine, which should launch production in late 2028.
A further $1 billion in growth expenditure is planned for 2027.
Copper expansion
At the 45%-owned Sierra Gorda copper mine in Chile, the ore reserve increased 61% to 1.1 billion tonnes. The partners also approved a fourth grinding line, which is expected to lift copper-equivalent production by about 30% from 2031.
Free cash flow increased by 136% to $610 million despite the heavy investment in Hermosa.
A final dividend of 5.4 US cents a share takes the full-year dividend to 9.3 cents, an increase of 55%.
The South African manganese business was a weaker spot, with higher diesel costs and a stronger rand reducing its operating margin from 13% to 8%.
“Looking ahead, the outlook for our business is positive as we focus on safe and stable operations and growing our production of base metals into structurally attractive markets,” said Daley.
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