South32 Ltd.: Timely aluminium exit, cleaner Cu/Zn growth story

Research evidence excerpt

South32 Ltd.: Timely aluminium exit, cleaner Cu/Zn growth story

Equity Research

European Metals & Mining

1 July 2026

South32 Ltd.

Timely aluminium exit, cleaner

Cu/Zn growth story

S32’s aluminium sale crystallises value above our US$3.4bn S32.L/S32 LN OVERWEIGHT

NPV, simplifies the portfolio and funds the pivot to Cu/Zn European Metals & Mining NEUTRAL

growth. Mozal remains a clean-up option, while Alcoa shares Price Target GBP 2.40

Price (01-Jul-26) GBP 2.30

and price-linked payments retain upside post exit. Potential Upside/Downside +4.3%

Source: Bloomberg, Barclays Research

The following listed companies are not under coverage by Barclays Research: Alcoa (AA).

Information about the company is being provided for information purposes only and is not an European Metals & Mining

investment recommendation by Barclays Research. Ian Rossouw, CFA

+44 (0)20 3555 2620

We see S32's sale of its aluminium value chain assets to Alcoa for up to US$5.6bn as a ian.rossouw@barclays.com

significant positive value-unlocking transaction. The deal realises an implied enterprise Barclays, UK

value of up to US$5.6bn ($6.8bn including rehab liabilities), comprising US$3.1bn upfront Amos Fletcher, CFA

cash, US$1.0bn in Alcoa shares ($0.8bn at US market close today), ~US$750m of net debt +44 (0)20 7773 2225

and lease liabilities assumed, and up to US$750m of contingent price-linked consideration, amos.fletcher@barclays.com

with Alcoa also assuming ~US$1.2bn of rehabilitation provisions. Relative to our US$3.4bn Barclays, UK

NPV for the assets, the transaction implies a ~18% premium on upfront cash and scrip Meet Mehta, CFA

before giving credit for assumed liabilities and contingent consideration, or 66% premium +91 (0)22 6175 1943

on the $5.6bn EV. meet.mehta@barclays.com

Barclays, UK