KEY POINTS
- Eskom and South32 have set up a joint team to develop renewable power for Hillside smelter.
- The Hillside aluminium smelter is the largest in the southern hemisphere at 720,000 metric tons yearly.
- South32’s Mozal smelter in Mozambique was placed on care and maintenance in March over power costs.
Eskom and South32 are working on a plan to power the Hillside aluminium smelter with renewable electricity from 2031, when the plant’s current discounted power contract with the utility expires.
The two companies confirmed on Tuesday that they have established a joint team to explore how competitively priced renewable energy can be brought into the national grid for Hillside. The plant, located on South Africa’s east coast, is the largest aluminium smelter in the southern hemisphere, producing 720,000 metric tons per year.
South32 Chief Operating Officer Noel Pillay said the momentum from the current partnership needs to carry through to a viable solution. “It is important we continue this momentum, working towards a viable, low-carbon energy solution for Hillside from 2031, when the current electricity contract expires,” Pillay said.
Eskom CEO Dan Marokane framed the collaboration as serving two goals simultaneously. He said it would develop a long-term energy solution that supports industrial competitiveness while advancing South Africa’s transition to a lower carbon electricity system.
Why the 2031 deadline matters
Hillside currently operates under a 10-year deal with Eskom for discounted power. South Africa grants discounted electricity tariffs to power-intensive smelters because these plants, which support tens of thousands of jobs, would likely close if forced to pay standard rates.
That calculation is not hypothetical. South Africa’s electricity costs have risen roughly tenfold since 2008, and dozens of industrial plants have shut down as a result. The Hillside plant has survived largely because of its preferential tariff arrangement.
The Mozambique warning
The urgency behind the Hillside planning is sharpened by what has already happened at South32’s other African smelter. The company placed its Mozal aluminium smelter in Mozambique on care and maintenance on March 15 after failing to secure sufficient and affordable power supply.
Mozal’s shutdown is a direct signal of what happens when a smelter loses its power security. It is also a warning that the Hillside timeline, still six years away, is not as distant as it might appear. Setting up a joint team now gives both Eskom and South32 the runway to design, procure and integrate a renewable solution before the 2031 contract expires, rather than scrambling when it does.
