South32 (S32): Stable Operations Strong Balance Sheet and Growth Projects on Track

South32 Limited has presented stable FY26 production outlook, stronger half year earnings, healthy cash position and ongoing expansion in major mining projects.

South32 Limited (ASX: S32)

on 16 March 2026 announced that Mozal Aluminium was placed on care and maintenance from 15 March 2026. This step came after long discussions with the Mozambique government and power suppliers. The company could not secure enough affordable electricity for future operations.

Mozal had operated for about 25 years and contributed strongly to the local economy and community. The closure process includes one-off costs of about US$60 million. There will also be ongoing yearly costs of about US$5 million to maintain the site. Alumina that was earlier sent to Mozal from Worsley Alumina will now be sold to external buyers at market linked prices.

Half Year Results

In its 2026 half year results for the period ending December 2025, S32 reported stable progress across operations. Safety programs helped improve performance. The production guidance and cost expectations for FY26 remain unchanged across all operated assets. S32 is also working on expanding mining areas at Worsley Alumina to improve bauxite supply.

At Cannington, ore reserves increased by 28 percent and future expansion options are being studied. Construction continues at the Hermosa project which is a long life zinc lead silver development. Exploration works also delivered positive copper results at the Peake deposit. Sierra Gorda progressed studies to improve future output and identified new exploration potential.

Financial Position

The company reported strong financial outcomes supported by stable operations and better prices for base and precious metals. Underlying EBITDA reached US$1.1 billion while underlying earnings grew to US$435 million. A fully franked interim dividend of US 3.9 cents per share was announced for the half year. The capital management program was increased to US$2.6 billion with US$209 million still to be returned. The balance sheet remains strong with US$1.7 billion in cash and access to a US$1.4 billion credit facility available until December 2028. During this period the company also completed the sale of Cerro Matoso which helped simplify the portfolio and improve margins.

Outlook and FY26 Guidance

For FY26, production guidance across operated assets remains unchanged. Though, output guidance for Brazil Aluminium has been lowered for both FY26 and FY27 due to stability improvements at the smelter. Total capital expenditure guidance for FY26 stays at US$1.4 billion.

Spending for safe operations has been slightly reduced due to timing changes while improvement projects remain steady. Growth investment continues mainly at the Hermosa project with US$750 million allocated. Capital spending for key expansion items has been revised to US$325 million. This includes higher investment at Sierra Gorda due to stripping activity and updated spending in manganese operations focused on infrastructure and equipment upgrades.

(Source: Company Report)