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South Africa’s Aluminium Industry Shines as South32 Breaks Records

Diversified mining company South32 achieved record half-year aluminum production, thanks to its Hillside Aluminium operation in KwaZulu-Natal, boosting South Africa’s aluminum industry and showing signs of resilience and growth.

by Motoni Olodun

South Africa’s aluminum industry is showing signs of resilience and growth, as diversified mining company South32 reported record half-year aluminum production, thanks to its Hillside Aluminium operation in KwaZulu-Natal.

The company, which produces commodities that are essential for the transition to a low-carbon future, said its Hillside Aluminium smelter achieved its highest-ever production of 376,000 tonnes in the six months to December 31, 2023. This was a 4% increase from the same period in 2022 and helped South32 achieve a total aluminum output of 492,000 tonnes, a 3% rise year-on-year.

Hillside Aluminium is the largest aluminum smelter in the southern hemisphere and has been a key player in South Africa’s aluminum industry for over 20 years. The smelter produces high-quality, primary aluminum for the domestic and export markets, using locally sourced raw materials and electricity.

South32 CEO Graham Kerr said the strong performance of Hillside Aluminium was driven by operational excellence and favorable market conditions, as aluminum prices soared to their highest levels in a decade amid strong demand and supply constraints.

“We are very pleased with the results from Hillside, which demonstrate the quality and reliability of our assets and our people. Aluminium is a vital metal for the decarbonization of the global economy, and we are well positioned to capture the opportunities in this growing market,” Kerr said in a release to Mining Weekly.

South32 also operates the Mozal Aluminium smelter in Mozambique, which faced some challenges in the first half of the 2023 financial year. The smelter’s saleable production decreased by 9% to 116,000 tonnes, and about 60% of its output was below-specification material in the last quarter of 2023, resulting in discounted prices. The company attributed the issues to power interruptions, equipment failures, and COVID-19 impacts.

As a result, South32 reduced its full-year production guidance for Mozal Aluminium by 12% to 226,000 tonnes, while maintaining its guidance for Hillside Aluminium at 720,000 tonnes.

Kerr said the company was working to restore Mozal’s performance and improve its product quality, as well as exploring options to increase its access to renewable energy sources in the region.

“We are committed to reducing our greenhouse gas emissions and supporting the energy transition in the countries where we operate. We are also investing in innovation and technology to enhance our operational efficiency and sustainability,” he said.

Besides aluminum, South32 also produces other commodities such as manganese, nickel, zinc, silver, and coal. The company reported mixed results for its other operations, with some facing headwinds from lower prices, higher costs, and logistical challenges.

However, Kerr said the company was focused on delivering cost efficiencies and expected to achieve a 7% production growth in the second half of the 2023 financial year.

“We have a diversified portfolio of high-quality assets that are well-placed to benefit from the recovery of the global economy and the demand for clean energy. We are confident that we can deliver value for our shareholders, our customers, and our communities in the long term,” he said.

South32 is not the only company that is optimistic about the prospects of the aluminum industry in South Africa. According to the Aluminium Federation of South Africa (AFSA), the sector has shown remarkable resilience during the Covid-19 pandemic and has the potential to create more jobs and exports, if supported by favorable policies and infrastructure.

AFSA executive director Muzi Manzi said the aluminum industry contributed about R18.4 billion to the country’s gross domestic product and employed over 11,600 people in 2022. He said the industry was ready to expand its capacity and market share, especially in the automotive, packaging, construction, and renewable energy sectors.

“The aluminum industry is a strategic and catalytic sector that can drive the industrialization and diversification of the South African economy. We have world-class smelters, refineries, and downstream manufacturers that can compete globally and meet the needs of the domestic market. We urge the government and other stakeholders to work with us to unlock the full potential of this industry and create a win-win situation for all,” Manzi said.

Source: Mining Weekly


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