JOHANNESBURG (miningweekly.com) – The use of hydrogen in difficult-to-electrify applications is being assessed at Worsley Alumina, the integrated bauxite mining and alumina refining operation in Western Australia, which supplies alumina to Hillside Aluminium in South Africa, Eskom’s largest single industrial customer.

However, production costs, markets and associated infrastructure will need to develop substantially for it to become a viable alternative, South32 stated in an emailed response to Mining Weekly on the prospect of the company using green hydrogen to lower the carbon factor in producing alumina, as is being piloted by Rio Tinto and Sumitomo, for example, in building the Gladstone hydrogen pilot plant to trial lower-carbon alumina refining.

Work to date has indicated that electrifying steam generation is likely to be preferable to the use of hydrogen. However, hydrogen may have a role to play in achieving the high processing temperatures required for calcination.

The Sydney-, Johannesburg- and London-listed South32, as a founding member of Australia’s Heavy Industry Low-Carbon Transition Cooperative Research Centre (HILT CRC), partnered in five of HILT CRC’s QuickStart projects in its 2022 financial year, covering topics such as low emission calcination and steam generation, energy storage, regulatory implications, and emissions profiling. HILT CRC, a collaborative venture between industry, government and research organisations, was formed to develop and accelerate technologies for heavy industry to transition to net zero.

On the steps taken so far to self-generate clean electricity at Hillside, South32 described its near-term decarbonisation initiatives at Hillside as being focused on energy efficiency, while it investigates options for an alternate low-carbon energy solution to transition Hillside’s energy source from coal-based power supplied from South Africa’s national electricity grid to secure, reliable and affordable low-carbon energy in the medium term.

It is seeking to partner with entities that focus on utility-scale energy projects and support their investments through long-term power purchase agreements (PPAs), subject to them being financially viable.

“We continue to work with Eskom, government, and commercial partners to develop and implement an energy solution at the scale required for a large aluminium smelter.

“Core streams of work to decarbonise Hillside Aluminium include engaging with Eskom to explore opportunities to convert our existing power agreement to low-carbon energy, and investigating options for sourcing and securing low-carbon power through PPAs with independent power producers and aggregators of renewable energy,” said South32, headed by CEO Graham Kerr.

Mining Weekly: How much has South32 benefited over the years by being allowed to pay electricity tariffs very well below the going rate at Hillside?

The negotiated pricing agreement (NPA) in place at Hillside was approved by National Energy Regulator of South Africa (Nersa) in 2021. At the time, Nersa publicly outlined its rationale for supporting the agreement, stating that there was a “net benefit to the rest of the customer base in putting this agreement in place”.

The pricing agreement helps the smelter to remain internationally competitive so it can continue to deliver benefits in South Africa.

Eskom has outlined in detail its rationale for the NPA with South32 in a publicly available submission to Nersa in February 2021. In its submission, Eskom noted Hillside’s role in supporting stability of the electricity grid.

Hillside plays an important role in keeping the electricity grid stable and helping to manage loadshedding given its consistent level of electricity consumption and the interruptibility provision in its energy supply agreement. During times of high strain on the national grid, Eskom interrupts around 450 MW of supply to Hillside’s potlines to support the grid, which means less loadshedding for other customers.

Taking into account Hillsides’ linkages to numerous other sectors, the smelter’s economy-wide contribution amounts to an estimated R25.8-billion, or 0.4%, of South Africa’s gross domestic product (GDP). Hillside’s economy-wide contribution to KwaZulu-Natal’s GDP amounts to R10.1-billion, or about 1.3%.

Hillside is one of the largest industrial employers in Richards Bay, directly employing close to 3 400 people in 2022 financial year.

What success has South32 had in taking the Metalloys manganese alloys smelter in Meyerton out of temporary care and maintenance?

Metalloys remains on care and maintenance while we assess options for the smelter. The are no further updates at this time.

The Bank of America strategy and business update stated that South32 is studying options to unlock logistics capacity in the manganese business in South Africa and to expand the high-grade Wessels mine. What steps will need to be taken to unlock that logistics capacity and what is the envisaged timeline?

We have embarked on a programme to upgrade our rail infrastructure to maximise flexibility and efficiency in our logistics, and this work is ongoing. In addition, South32 is engaging with Transnet and industry in order to participate in initiatives and projects to unlock additional rail capacity for manganese. We are investing in infrastructure to access new mining areas at Wessels, as well as upgrades to our rail and logistics infrastructure. Secure access to rail and port infrastructure is critical to South32’s sustainable manganese operations in the Northern Cape and providing confidence for future investment decisions.