Eskom, South32 Eye Renewable Power Deal for Hillside Smelter

South Africa’s state utility Eskom and mining group South32 are developing a renewable energy plan for the Hillside aluminium smelter, with implementation targeted for 2031.

The proposed initiative will support the Hillside plant, one of the largest aluminium smelters in the southern hemisphere, as its current 10-year discounted electricity agreement with Eskom approaches expiry.

Located on South Africa’s east coast, the facility produces around 720,000 tonnes of aluminium annually and is heavily reliant on affordable electricity to remain viable.

Power-intensive smelters in South Africa benefit from reduced tariffs, reflecting their economic importance and the risk of closure should they face full market rates in a country where electricity costs remain high and largely driven by coal-based generation.

Electricity prices have surged tenfold since 2008, contributing to the shutdown of numerous industrial operations.

In a joint statement, Eskom and South32 confirmed the formation of a joint team tasked with exploring ways to introduce competitively priced renewable energy into the national grid.

South32’s Chief Operating Officer, Noel Pillay, said the collaboration aimed to secure a “viable, low-carbon energy solution” for Hillside beyond the current contract.

“It is important we continue this momentum… working towards a viable, low-carbon energy solution for Hillside from 2031,” he said.

Eskom Chief Executive Dan Marokane added that the partnership would help deliver a long-term solution balancing industrial competitiveness with the country’s transition to cleaner energy.

The move follows South32’s recent decision to place its Mozal aluminium smelter in Mozambique on care and maintenance after failing to secure sufficient and affordable electricity, underscoring the sector’s vulnerability to energy constraints.

The planned collaboration reflects growing pressure on both government and industry to align economic sustainability with South Africa’s broader shift towards a lower-carbon power system.