Diversified miner South32 has made a final investment decision on the roll-out of the AP3XLE energy efficiency project at its Hillside aluminium smelter, in KwaZulu-Natal.

The technology has already been deployed at the company’s Mozal aluminium smelter in Mozambique.

The company said on February 17 that it expected to roll out the AP3XLE technology at Hillside alongside the smelter's pot relining programme during the 2023 financial year as part of a plan to decarbonise the operation.

The AP3XLE project will provide both volume and efficiency benefits, while reducing carbon intensity, the diversified miner noted.

The company said it expected to spend about $18-million over five years to install AP3XLE at Hillside, in addition to the normal pot relining activity.

The cost of pot relining at the smelter increased by $6-million in the six months ended December 31, with 70 pots relined at a cost of $259 000 a pot, compared with the 50 pots relined at $238 000 a pot in the same period in 2020.

The company said its pot relining activities were expected to increase in the six months to June 30, this year, with 181 pots scheduled to be relined in the current financial year.

Speaking to shareholders and investors, South32 CEO Graham Kerr said that, beyond the AP3XLE technology, long-term efforts to decarbonise Hillside's power supply were currently at a prefeasibility stage. He added that, on a technological front, the solutions were apparent but that policy certainty was still to be desired.

"What we have to continue to work on are the policy changes. There's still some tension at a political level around the role that coal plays versus what role renewables are going to play," he commented. He added that, owing to the fact that much of the aluminium produced at Hillside finds its way into European markets, making the operation greener was essential to keeping the operation alive and preserving jobs.

South32 COO Noel Pillay added that it was important for stakeholders to rally together to influence policy. He further confirmed that a "high-powered" team had been mobilised to work on the long-term decarbonisation project.

"We've done a context study and we've seen a menu of options. The project is technically complex but that's just part of the issue. Working with stakeholders to influence policy is really where the work lies," he said.

Meanwhile, Hillside’s saleable aluminium production decreased by 1% – about 3 000 t – to 358 000 t for the six months ended December 31, as the smelter continued to test its maximum technical capacity, despite the impact of higher load-shedding, the company said.

The production guidance for Hillside for the full 2022 financial year is unchanged at 720 000 t.

Further, Mozal’s aluminium saleable production increased by 1% – or 1 000 t – to 136 000 t for the six months ended December 31, as the volume benefit of the AP3XLE energy efficiency project more than offset the impact of higher load-shedding.

Production guidance for Mozal for the full year also remains unchanged at 273 000 t, but will be updated in due course to reflect South32’s increased shareholding in Mozal.

South32 is in the process of acquiring an additional 16.6% shareholding in Mozal, thereby increasing its shareholding to 63.7% this quarter.

The AP3XLE energy efficiency project at Mozal is expected to deliver an incremental production increase starting in the current financial year, before realising about a 5% increase in yearly production from the 2024 financial year, with no associated increase in power consumption.

MANGANESE
South32’s South African manganese operations produced 1.05-million tonnes of manganese ore in the six months to December 31, a 7% year-on-year increase on the back of higher volumes of premium material being supplied from the Mamatwan mine and the completion of planned maintenance.

Full-year production guidance has been restated at two-million tonnes to reflect South32’s 54.6% interest.

Meanwhile, the Metalloys manganese alloy smelter – which is owned by the Samancor Manganese Joint Venture, in which South32 owns a 60% stake and Anglo American 40% – remained on care and maintenance since March 2020. On November 29 last year, Samancor entered into a binding agreement to sell the smelter to ferromanganese producer Satka Investments.

“Satka is an experienced operator in manganese alloys [and] has successfully reconfigured and restarted operations in the past. We are pleased that Satka intends to determine a pathway to sustainable production at Metalloys for the benefit of all stakeholders," Kerr said at the time.