The transition ensures that the diversified miner's pricing is tied to market fundamentals, Peter Finnimore, South32's head of marketing, said.
"We don't enter into contracts other than index or spot-based contracts. We don't do London Metal Exchange percentage-linked contracts," Finnimore said.
Metal Bulletin's fob Australia alumina index, which was launched in 2010 in response to calls for a reference price tied to the fundamentals of the alumina market, and since emerged as a benchmark for the industry.
As a percentage of the three-month aluminium price on the LME, alumina has traded between 13% and above 20% in the past 18 months, according to Metal Bulletin's index.
The wide range, which is illustrative...