The South32 Ltd (ASX: S32) share price has been a positive performer on Thursday.
In morning trade, the mining giant's shares are up almost 1% to $4.05.
This leaves the South32 share price trading within touching distance of its multi-year high of $4.13.
Why is the South32 share price rising?
The catalyst for the rise in the South32 share price on Thursday has been an announcement relating to its Brazilian aluminium operations.
According to the release, the company and its joint venture partner Alcoa have decided to restart the Alumar aluminium smelter (Brazil Aluminium). This follows over six years of being on care and maintenance mode.
The smelter is expected to be generating its first production in the June quarter, with full capacity of 447ktpa forecast to be achieved by the March 2023 quarter. Once at full capacity, South32's group wide annualised equity share of aluminium production is expected to lift by 16% or 179kt to 1,269kt.
The company expects to invest ~US$70 million across FY 2022 and FY 2023 to support the smelter's restart. This includes ~US$10 million in capital expenditure.
Renewable energy shift
South32 highlights that its 40% share of Brazil Aluminium will be powered by 100% cost efficient renewable power. This will place the smelter in the second quartile of the global aluminium site cost curve.
Furthermore, with its energy requirements secured under long term contracts, South32's alumina supply will be sourced from the co-located Brazil Alumina refinery (36% South32 share), offering substantial efficiencies.
South32's Chief Executive Officer, Graham Kerr, said: "We are excited to participate in the restart of the Alumar smelter using 100% renewable power. With the smelter benefitting from existing infrastructure, access to our own supply of alumina and long-term green energy sources, we expect our investment to deliver strong returns through the cycle."
"We see strong long-term market fundamentals for aluminium. By investing along our existing alumina-aluminium value chain with the smelter's restart and the expected increase to our shareholding in Mozal Aluminium, we are further integrating our business and meaningfully increasing our share of metal produced utilising green energy."
Mr Kerr also notes that this agreement is further enhancing its portfolio overhaul.
He explained: "With this decision we continue to make substantial progress in reshaping our portfolio, increasing our exposure to the base metals required for the critical transition to a low carbon future."
