Australian mining company South32 Limited is on shifting ground. Analysts at RBC Capital Markets have reduced South32’s price target to AUD3.20 (USD 2.0) from AUD3.50 (USD 2.28), even after it posted 75 per cent jump in annual profit to USD 666 million. However, despite the price target cut, analysts have kept an “outperform” rating for the company, demonstrating a belief in its long-term potential over short-term risk. The reduction reflects concerns over operational hurdles at South32 and softer market conditions.
Insider buying has offered reassurance, hinting at confidence from management. South32 is also repositioning itself. Its shift into low-carbon commodities such as lithium, nickel and manganese aligns with global decarbonisation trends, particularly renewable energy and EV supply chains.
Balancing profits with challenges
Although profits soared, results were lower than the analyst consensus of USD 697.7 million. Dividends also softened, dropping to USD 0.026 per share. Last year, the original price per share was USD 0.031. More significantly, South32 announced plans to place its Mozal Aluminium smelter in Mozambique under care and maintenance by March 2026. This action, driven by escalated power costs, is expected to result in a USD 372 million impairment in FY25.
Importantly, these challenges have not overshadowed our operating strengths, with alumina operations continuing to support earnings and with South32 remaining nimble in the face of inconsistent market conditions.
Also read: South32 posts 60% reduction in injury rates, contrary to WorkSafe WA’s safety risk data
Aluminium smelters beat targets
In a separate update, South32 confirmed its aluminium arm is thriving. Brazil Aluminium and Mozal Aluminium exceeded FY25 production targets by 6 per cent and 1 per cent, respectively. The Brazil plant, restarted recently, lifted saleable output by 30 per cent in Q2 FY25. Mozal, despite unrest in Mozambique and power concerns, saw a 13 per cent boost.
CEO of South32, Graham Kerr, stated, “We delivered another strong quarter of operating performance, exceeding the Group's FY25 production guidance, driven by annual production growth of 20 per cent in copper and 6 per cent in aluminium. With operating momentum, an upgraded portfolio and a strong balance sheet, we are well-positioned to deliver growth and returns.”
Aluminium demand remains central to South32’s future. Its Worsley Alumina JV in Western Australia has started mining new bauxite areas, securing supply through FY36. The mix of caution and optimism shows why analysts stay bullish. Operational excellence and portfolio shifts support resilience.
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