South32 CEO Expects U.S. Tariffs to Raise Consumer Costs, Not Disrupt Sales

South32, a major aluminum producer, does not anticipate significant disruptions in its shipments to the U.S. despite upcoming blanket tariffs on aluminum imports under the Trump administration. CEO Graham Kerr stated that the increased costs would likely be passed on to American consumers rather than reshaping the company's sales strategy.

The U.S., which imports over 80% of its aluminum needs, relies heavily on shipments from countries such as Canada. South32's Hillside smelter in South Africa, the largest in the Southern Hemisphere, accounted for approximately 16% of the company's aluminum revenue in the second half of 2024. While aluminum prices fluctuate, Kerr does not expect the new tariffs to materially impact the company’s market positioning.

Kerr noted that if the tariffs led to increased domestic aluminum production, it could shift the market over time. However, he believes future production growth is more likely in regions with cheap renewable energy, such as Canada, Europe, Indonesia, and Malaysia, rather than in the U.S.

Uncertainty remains over whether the tariffs are a long-term policy or a negotiation tool, Kerr said. Trump has framed them as the start of revitalizing American industry, but South32 sees continued reliance on imports, particularly from Canada, which supplies over half of U.S. aluminum imports.

South32 primarily sells aluminum to Europe and operates smelters in Mozambique and Brazil. The company has no plans to build new aluminum facilities, instead focusing on minerals critical to the energy transition. It is currently constructing a $2.16 billion zinc, lead, and silver mine in Arizona and has received grants from the U.S. government to support battery-grade manganese production.