Alcoa’s US$5.6B Hillside acquisition boosts South Africa’s aluminium packaging supply chain

SOUTH AFRICA – Alcoa has signed a binding agreement to acquire South32’s aluminium assets, including South Africa’s only primary smelter in Richards Bay, in a US$5.6 billion deal that will secure Hillside’s operations and strengthen the country’s metal packaging value chain.

The transaction gives Alcoa ownership of Africa’s largest aluminium smelter, the Hillside smelter, which produced 718,000 tonnes of aluminium in fiscal 2025. 

Alcoa will pay US$3.1 billion in cash, US$1 billion in shares, assume US$750 million in debt, with up to US$750 million in contingent payments linked to future prices. 

The deal also includes Australian and Brazilian assets but excludes South32’s Mozal smelter in Mozambique. 

How Hillside’s Power Agreement and 718,000-Tonne Capacity Support South African Industry

Hillside, the Southern Hemisphere’s largest smelter, supplies liquid metal to local producers including Hulamin and Wispeco, with deliveries being increased toward a 240,000-tonne-per-year target for downstream value-added production. 

The smelter directly employs more than 2,500 workers and supports an estimated 29,000 indirect jobs across the economy. 

South32 CEO Graham Kerr stated that the transaction will unlock significant value for shareholders and reposition South32 as a leading upstream base metals company. 

Hillside’s long-term electricity agreement with Eskom, which runs until 2031 and provides power at about half standard industrial tariffs, significantly enhances the asset’s value. 

What the Acquisition Means for South Africa’s Metal Packaging and Exports

The South African metal packaging market is expected to grow from US$1.06 billion in 2026 to US$1.27 billion by 2031, driven largely by beverage cans. 

Alcoa’s acquisition strengthens an allied aluminium supply chain stretching from Australian bauxite through South African smelting to European and global markets. 

The deal reinforces South Africa’s positioning as a regional beneficiation hub under the African Continental Free Trade Area Agreement, with the aim of supplying semi-fabricated aluminium products to neighbouring markets for automotive, construction and packaging applications. 

Alcoa expects the acquisition to add approximately 3.2 million tonnes of aluminium and 14.8 million tonnes of alumina to its annual production capacity, further strengthening its position as a global supplier.

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