South32 has reported an 11% increase in copper production at its Sierra Gorda mine in early FY27, marking a record quarterly distribution from the Chilean asset. The company also made progress on copper and zinc projects and secured shareholder approval for the sale of its aluminium operations to Alcoa, with completion expected by June 2027. These developments highlight South32's strategic shift toward copper and base metals, simplifying its portfolio by moving away from aluminium.
The latest copper production boost and record cash distribution from Sierra Gorda support South32's existing narrative but do not alter the key risks of project execution and cost control. The planned sale of the aluminium portfolio to Alcoa will further concentrate the company's focus on copper and base metals, increasing exposure to projects like Sierra Gorda and Hermosa. Analysts are modelling revenue of $6.2 billion and earnings of $1.1 billion by 2029, assuming 1.6% yearly revenue growth and flat earnings compared to current levels.
Some analysts are more optimistic, predicting revenue of about $6.6 billion and earnings of $1.7 billion by 2029, driven by potential growth at Hermosa. The divestment of aluminium assets will sharpen the focus on capital deployment into copper and other base metals, with fewer legacy operations to cushion against delays or rising costs. South32's fair value indicates a 13% potential upside to its current price, though this could narrow quickly.