Safeguarding jobs key in Richards Bay smelter sale

South32 to sell its aluminium value chain assets, including Hillside Aluminium in Richards Bay

20 hours ago

Gugu Myeni 2 minutes read

Hillside Aluminium smelter in Richards Bay

While the pending sale of Hillside Aluminium could bring much-needed expertise and spur further economic growth locally, safeguarding jobs should remain a priority.

Economist at the University of Zululand, Professor Irrshad Kaseeram says although this is a positive nod to the local aluminium industry, the change in investors should maintain stability.

ALSO READ: Hillside Aluminium joins forces with local municipalities to deliver water infrastructure

This follows South32’s recent announcement that it is selling its aluminium value chain assets, including the Richards Bay smelter, in a sale agreement worth $5.6bn (R91.7bn).

Alcoa Corporation, an American aluminium producer, will acquire South32’s interests in the Hillside aluminium smelter and idled Bayside smelter property.

“Alcoa needs to work closely with the trade unions to ensure a smooth transition, and to give a clear picture of what the nature of the rationalisation would be. Also to give commitments about whether the labour rights would be protected and to what extent,” said Kaseeram.

“They would need to outline what sort of job losses this whole takeover will entail. Then there will also be co-regulatory bodies like the Competition Commission, the Reserve Bank, with repatriation of profits, all of which needs to be complied with.

“However, I am certain Alcoa would have done their due diligence before acquiring these companies, and so must have some strategies in place. To what extent this transition will cause challenges, is a wait-and-see approach.

“But the regulatory compliance issues, the cultural differences, and our strict labour laws are there.”

Growth prospects

Kaseeram, however, expressed optimism that Alcoa will bring their expertise and transfer of technology capital into South Africa to make these operations more effective and profitable.

“One of our challenges in South Africa is research and development, which we don’t invest much in local companies compared to American companies.

“We will, therefore, have the benefit of their intellectual property, which will make these businesses more viable, more sustainable, and also to compete with countries such as China,” he said.

The conditional sale agreement with South32 also includes the Boddington bauxite mine and the Worsley alumina refinery in Western Australia, the Mineração Rio do Norte (MRN) bauxite mine, and the Alumar alumina refinery and aluminium smelter in Brazil.

The transaction is expected to close in the first half of 2027, subject to the approval of South32’s shareholders and regulatory approvals, among other conditions.

South32 COO Africa Noel Pillay said the sale of Hillside Alumunium recognises the value the smelter is expected to continue to deliver, supporting local jobs, communities and the economy.

“The smelter will be operated by a dedicated aluminium producer, who will bring the benefits of its deep aluminium value chain experience to the region,” said Pillay.

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