Diversified mining company South32 has sharpened its focus on copper, aluminium and other commodities tied to the global energy transition, reporting stronger earnings while confirming plans to exit or wind down some of its operations.

The Perth-based miner lifted profit after tax attributable to members by $416-million to $213-million in the 2025 financial year to June 30, despite impairments on its Mozal Aluminium smelter in Mozambique ($372-million) and the Cerro Matoso nickel mine in Colombia ($118-million).

Underlying earnings increased by $286-million to $666-million, supported by strong commodity prices and production from its critical minerals portfolio. 

Chief executive Graham Kerr said on Thursday the results underpinned a transformation of South32’s portfolio. “Strong operating performance during the year enabled us to capitalise on improved commodity prices, with underlying earnings before interest, tax, depreciation and amortisation increasing to $1.9-billion and underlying earnings increasing to $666-million,” he said.

“We increased our production of commodities critical to the global energy transition, delivering annual production growth of 20% in copper and 6% in aluminium. Key operational milestones were achieved, with Worsley Alumina securing environmental approvals for new bauxite mining areas, and Australia Manganese completing its operational recovery plan following the impacts of Tropical Cyclone Megan.”

Revenue fell 8% to $7.61-billion as the sale of Illawarra Metallurgical Coal in 2024 and weather-disrupted manganese output offset higher prices. South32’s cost base declined by nearly $600-million to $5.44-billion, aided by the coal exit and tighter cost control.

The company is now streamlining further, with Cerro Matoso set to be divested and Mozal Aluminium likely to be mothballed when its power supply contract expires in 2026.

“At Mozal Aluminium, despite engaging with stakeholders for several years, we do not have confidence that the smelter will secure sufficient and affordable electricity supply beyond March 2026,” Kerr said. “As a result, we are limiting investment in Mozal Aluminium, and currently expect that the smelter will be placed on care and maintenance in March 2026.”

Meanwhile, South32 is ramping up investment in its base metals pipeline. Its Hermosa project in Arizona advanced construction of the large-scale Taylor zinc/lead/silver mine, while copper production at Sierra Gorda in Chile jumped 20% to 88 100 t.

Sierra Gorda continued to invest in studies and exploration to grow future copper production, including a feasibility study for the fourth grinding line expansion, which has the potential to increase plant throughput by about 20% to 58-million tonnes a year (100% basis). The feasibility study for the fourth grinding line is expected to be completed late in the first half of the 2026 financial year.

Cannington, in Australia, reported a 20% decrease in payable zinc output to 241 900 t in 2025 and output is set to reduce to 200 600 t in 2026, owing to increased underground complexity.

Alumina output held steady at 5.1-million tonnes, with approvals at Worsley Alumina expected to sustain production to at least 2036. Aluminium output grew 6% to 1.21-million tonnes, led by Hillside Aluminium in South Africa and Brazil Aluminium’s ramp-up.

South Africa Manganese production was largely unchanged at 2.15-million tonnes in 2025, as the operation continued to deliver strong mining performance and benefitted from improved access to in-land rail logistics. Production is expected to be 2-million tonnes across both 2026 and 2027.

Kerr said divesting older assets and leaning into future-facing commodities was critical to positioning South32 for growth.

The company is also investing in the discovery of the next generation of base metals mines, with $35-million going into greenfield exploration programmes in 2025. 

Further, it has expanded its pipeline of copper exploration options with its strategic alliance with Noronex to explore for copper in the Kalahari copper belt in Namibia enlarged to include tenements in Botswana. South32 also acquired a 19.9% interest in American Eagle Gold, which holds an option to acquire a 100% interest in the Nakinilerak copper exploration prospect in British Columbia, Canada.