Recasts lead, adds details, investor comment in paragraphs 1-4

By Melanie Burton and Shivangi Lahiri

July 1 (Reuters) - Australia's South32 S32.AX said on Wednesday it has agreed to sell most of its aluminium assets to Alcoa AA.N for an implied enterprise value of up to $5.6 billion, as the diversified miner streamlines its business to focus on copper under a new CEO.

For Alcoa, the deal expands access to upstream assets including bauxite, alumina and aluminium assets across Brazil, South Africa, and Western Australia where it can harness its proximity to South32, given both operate alumina refineries within a few hundred kilometres of each other.

For South32, the deal will free up capital and focus for the company's newly minted CEO Matthew Daley to chase higher-margin growth assets as it expands copper production in Chile and base metals in the U.S.

"This deal shows South32 is getting much more focused on base metals," said portfolio manager Andy Forster of Argo Investments in Sydney, which holds South32 shares. "It should be taken well by the markets today."

Shares in South32 jumped as much as 10% in early Australian trading.

The U.S.-based aluminium producer will assume about $1.2 billion in cleanup and site-closure liabilities tied to the assets, South32 said.

"Our business will be simpler with a portfolio of higher-margin upstream operations, reduced complexity and greater resilience," said Daley, who took over as South32's chief executive and managing director on Wednesday.

Daley said the sale would help deliver an expected $125 million in annual overhead cost savings as new support structures are put in place.

The transaction is expected to complete in the second half of 2027, after which the Australian miner intends to return around $500 million to shareholders as a fully franked special dividend.

In a separate statement, Alcoa said the cash-and-stock deal is expected to allow it to cut costs by some $900 million in net present value.

"Greater scale and integration are expected to reduce complexity, lower costs, and improve competitiveness while strengthening supply chain resilience across key jurisdictions," Alcoa added.

As well as acquiring South32's stakes in Australia's Worsley Alumina, Alcoa will also acquire South Africa's Hillside Aluminium, Brazil's MRN bauxite mine, its Brazil alumina refinery and aluminium smelter.

The transaction excludes South32's Mozal aluminium smelter in Mozambique, which was placed on care and maintenance in March as the firm failed to secure a sufficient and affordable power supply.

In a separate statement, South32 said Chile's Sierra Gorda joint venture approved a fourth grinding line expansion to lift processing capacity by about 25%, with growth capex expected at around $725 million between 2027 and 2030.

This will significantly increase copper production and lower operating unit costs, Daley said.