South32 seeks nuclear power for its Hillside Aluminium smelter, already in talks with Eskom

According to a report on February 16, South32 is in talks with Eskom, a South African electricity public utility, to source nuclear power for its Hillside Aluminium.

Graham Kerr, CEO of South32, said the company had been seeking nuclear power for its smelter to make the production sustainable because, in his view, Europe would only consume green aluminium in the future. He also said bringing Eskom to an agreement was critical.

As per the report, South32 is mulling sourcing half of the total power produced by the 1800MW koeberg nuclear facilities in the Western Cape.  Kerr stated South32 was willing to pay a premium price for nuclear energy supply because it noticed European customers were paying $10 per tonne premium for green aluminium and were likely to spend as much as $40 per tonne in the mid-term and much more in the long-term.

“The way I think about it is that the nuclear isn’t particularly allocated to someone,” said Kerr. “We are certainly looking for a premium to access nuclear power because it is accepted as an energy source for green aluminium.

He also said, “Keep it mind it’s not Hillside that benefits from this but downstream such as Hulamin and the majority of their production goes into Europe so it’s quite a connected value chain. We are willing to pay premium to access that allocation of power.”

South32’s agreement with Eskom replaced a long-standing power supply deal in which the cost of electricity supplied to Hillside was linked with the LME aluminium price movement.