Asset Quality
Bauxite, Alumina, Aluminum
The South32 Ltd. (SOUHY, S32.AX) story starts with aluminum, from which the company currently derives almost half of its earnings before interest, taxes depreciation and amortization (EBITDA).
Aluminum production starts by mining bauxite ore. The red bauxite rock is then crushed and sent to a refinery, which extracts alumina using the Bayer process (digestion, clarification, precipitation, and calcination). The final product from this stage is white alumina powder, which is sent to aluminum smelters to produce the final aluminum product.
South32 derives almost 25% of its EBITDA from