Worsley Alumina is shielded from Trump tariffs on aluminium, South32 boss Graham Kerr suggests

Donald Trump’s war on free trade is not expected to cut into the WA arm of South32, which saw half-year profit more than sextuple on the back of rising commodity prices. The mixed metal miner’s boss, Graham Kerr, believes the Worsley Alumina operation in WA’s South West will likely remain unscathed by President Trump’s 25 per cent tariff on aluminium and steel. “I don’t see the demand for the aluminium product where (Worsley’s) alumina goes into significantly shifting,” Mr Kerr said. “What we do actually expect to see is that the US is going to continue to need aluminium, roughly 80 per cent of their (aluminium) imports come from Canada.” Canada is a key target of the import tax. South32 turns the bauxite it digs up from WA’s jarrah forests into alumina at Worsley, then ships about half of that aluminium feedstock product to its own smelters in Southern Africa and the remainder to customers across the globe. Mr Kerr’s comments came after S32 on Thursday morning revealed its revenue for the final six months of 2024 rose 25 per cent year-on-year to $US3.1 billion ($4.9b), underpinning a net profit increase from $US59 million to $US360m. Higher average realised prices across S32’s basket of commodities drove the surge. S32 fetched $US282m more for its alumina, $US223m more for aluminium, and a combined extra of $US91m for its copper, silver and zinc. The elevated prices offset a raft of cost niggles across S32’s global operations, which included a $US21m hit at Worsley from higher caustic consumption “primarily due to lower quality bauxite in the current mining areas as a result of delayed mining approvals”. S32 on Wednesday finally secured the Federal Government approvals necessary to extend mining at Worsley, which sustains about 1700 jobs. The half-year result was slightly better than most analysts were predicting, particularly the interim dividend of US3.4¢ versus consensus of US3.2¢. “We delivered a strong start to FY25, off the back of our improved operating performance and transformed portfolio,” Mr Kerr said. “FY25 production guidance remains unchanged, except for Mozal Aluminium where we have updated production guidance as we continue to mitigate the impact of civil unrest in Mozambique. “Our operating discipline and weaker producer currencies are expected to support lower operating unit costs for the majority of our guided operations in H2 FY25.” Shares in S32 were up 3.5 per cent to $3.55 each at 11.25am.