South32 Ltd: The ‘S32 is simpler already’ tour: shrink to grow back

Research evidence excerpt

South32 Ltd: The ‘S32 is simpler already’ tour: shrink to grow back

Accessible version

South32 Ltd

The ‘S32 is simpler already’ tour: shrink to

grow back

Maintain Rating: BUY | PO: 4.90 AUD | Price: 3.96 AUD

Growth, returns + simplification: more to come? 09 July 2026

S32 hosted a round table post the aluminium value deal. See US$5bn crystallisation of Equity

Ali portfolio. Focus was on i) growth projects: Hermosa, Cannington extension, Sierra

Gorda (& Spence) ii) further simplification: manganese, 3x listings ASX/LSE/JSE, Mozal? Kate McCutcheon >> Research Analyst

iii) $125m in cost-out: 50/50 corporate overhead vs sites iv) balance sheet: removed Merrill Lynch (Australia)

fixed payout, has $1.6bn franking balance to use v) what next: establish a track record of +61kate.mccutcheon@bofa.com2 9226 5728

delivery/execution, not at a scale to take on multiple 'Hermosas' i.e. M&A bar is high. Elaine Faddis >>

Research Analyst

Hermosa: not just Taylor, mill to match mine? Merrillelaine.faddis@bofa.comLynch (Australia)

S32 sees the Hermosa complex as materially larger than currently understood: Peake Chen Jiang >>

(Cu) open at depth, 15 targets on package. FAST 41 permit approved=grid power, land Research Analyst

Merrill Lynch (Australia)

access for step out drilling and tailings storage. Underground materials handling >6Mtpa +61 2 9226 5771

vs 4.3Mtpa mill throughput, suggesting debottlenecking potential. Permit amendment chen_jiang@bofa.com

for a bigger mill is a simpler process. Development: ~80% of capex priced or committed. Paul Wiggers de Vries

Note included a $230m contingency for any schedule-related 'overrun'. Our Hermosa Merrill Lynch (Australia)

note here. Vent shaft ~2months away from bottom, sink rates improving, contract paul.wiggersdevries@bofa.com