Alcoa will recommence production at Alumar in Brazil, having completed a feasibility study. Credit Suisse suspects South32, which owns 40%, is yet to obtain the full details of the study and ccomplete its work.
The broker notes the Alumar smelter was at the top of the cost curve when it was idled in 2015 and likes the potential, given this is "green" aluminium.
Outperform rating maintained. Target is $3.80.
Target price is $3.80.Current Price is $3.34. Difference: $0.46 - (brackets indicate current price is over target). If S32 meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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