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- South32 will invest $70 million in the restart of the Alumar aluminium smelter in Brazil.
- The mining group's 40% stake in the operation will be powered entirely by cost-efficient renewable power.
- The move forms part South32's strategy to increase its exposure to green metals and to increasingly produce its products using renewable energy.
South32 plans to restart its shuttered Brazil Aluminium smelter using a mix of wind, hydro and solar power.
The diversified mining and metals group on Thursday announced it would participate in the restart of the Alumar aluminium smelter , which has been on care and maintenance since 2015, together with its joint venture partner Alcoa Corporation.
South32, a company spun out of mining giant BHP Billiton in 2015, said it s40% share will be powered by 100% cost efficient renewable power, secured under long-term contracts, and will place the smelter in the second quartile of the global aluminium site cost curve.
South32 expect to invest around $70 million to support the restart.
First production is expected in the June 2022 quarter, with full capacity from the smelter’s three potlines to be achieved in the March 2023 quarter and will lift the group’s annual aluminium production by more than 16%.
The restart, along with the introduction of green power, forms part of South32’s strategy to reshape its portfolio to increase its exposure to base metals required for the transition to a low carbon future.
“We see strong long-term market fundamentals for aluminium," said Kerr. "We are further integrating our business and meaningfully increasing our share of metal produced utilising green energy."
The group –which has promised to cut its direct and secondary carbon emission in half by 2035 – is also pursuing significant green energy plans for its energy intensive Mozal smelter in Mozambique and the Hillside smelter in South Africa.
The greening of the power from these smelters is critical to South32’s decarbonisation commitments as almost 90% of its secondary or Scope2 emissions are owed to the coal-fired power it is supplied by South Africa's Eskom.
The group has rolled out energy efficiency technology at Mozal, and plans to do the same at Hillside.
Smelting is amongst the most energy intensive of industries with aluminium and steel smelting especially so. Greening smelting operations remains a formidable challenge for an industry which requires large amounts of consistent power around the clock.
While Mozal and now Brazil Aluminium have the benefit of hydro power, Hillside - located in Richards Bay – does not.
South32, is of the view that over the next decade, the economic and technical challenges in order to deliver continuous power to the smelter using renewables can be met.
Notably, in November last year Rio Tinto, a major mining group, announced it and Alcoa had successfully trialled a method to produce aluminium without generating any greenhouse gas. The two aim to make the technology available for installation from 2024 onwards.
