JOHANNESBURG (miningweekly.com) – The long-term energy transition solutions on which South32 is focused are renewable energy and electrification.

The Sydney-, Johannesburg- and London-listed diversified mining company has transitioned to 100% renewable electricity supply at Sierra Gorda copper mine in Chile and is deploying AP3XLE energy efficiency technology at Hillside Aluminium in South Africa to deliver near-term reduction in greenhouse gas (GHG) emissions.

“As part of our transition away from carbon-intensive energy, we remain mindful of the need to support a fair and just transition for the smelter’s workforce, local communities, and the broader South African economy,” South32 CEO Graham Kerr told Thursday’s annual general meeting (AGM) covered by Mining Weekly.

Hillside plays an important role in South Africa, directly and indirectly supporting more than 31 000 jobs and contributing R9.9-billion to South Africa’s gross domestic product.

Hillside’s longer-term decarbonisation is tied to the transition to a lower-carbon energy source “and there is no doubt that this represents a challenge, particularly when it comes to developing large-scale renewable and low-carbon energy sources in South Africa”, Kerr stated in his address to the AGM.

Hillside is continuing to investigate a range of potential solutions including acquiring nuclear energy attributes to reduce Hillside’s emission intensity in the near term.

“We have signed a non-binding memorandum of understanding with Eskom to explore the potential to enter into a pilot agreement to purchase energy attributes associated with electricity generated at Eskom’s Koeberg nuclear power station,” said Kerr.

Operations that account for the majority of South32’s GHG emissions are largely aluminium-related, taking in Hillside, Mozal in Mozambique, and Worseley in Australia.

Hillside’s relationship with Eskom is described as being very strong. “The teams of Hillside and Eskom have an amazing level of cooperation and communication from both sides. We have a bit of time to get the nuclear piece right around carbon border adjustment mechanism (CBAM), but we don’t see that as decarbonisation but rather keeping access to a market and as a very early interim step to longer-term pushing to renewables.”

The memorandum of understanding with Eskom centres on allowing Hillside to maintain aluminium supply to Europe, particularly in the light of the CBAM coming into place.

“We see that as protecting the smelter while we work with Eskom and other counter parties to build out renewables that ultimately will replace the coal-fired power generation stations in South Africa.

“We’ve got some time to do this. There are some short-term imperatives around maintaining the access to European market with CBAM.

“We’re very conscious about transitioning in a way that involves us engaging heavily with the government at national level but also at provincial KwaZulu-Natal level and employee level. This is a medium- to long-term fix which requires us to push in the right direction,” said Kerr.

Meanwhile, roll-out of the AP3XLE energy efficiency programme is allowing Hillside to advance towards producing the same amount of product but with less electricity.

“We’re in the process at the moment of going out to renewables quotes to see how that is developing into the marketplace, with the timeframe again being longer term.”

About 50% of South32’s book is exposed to the aluminium value chain, for which demand has not been as strong as hoped coming out of Covid.

Regarding the aluminium price continuing to be low, Kerr said: “While it’s a bit depressed at the moment, in the long term we see positivity in the aluminium industry.”