South32 Limited announced long-term energy supply agreement has been finalized for its Hillside Aluminium smelter. South Africa’s National Energy Regulator has approved a deal between Eskom Holdings SOC Limited (Eskom) and Hillside.

 The smelter will receive energy until 2031, under a tariff that is South African rand based with a rate of escalation linked to the South Africa Producer Price Index.

With the new tariff agreed, the smelter remains competitively positioned on the global smelter cost curve.

South32 Chief Executive Officer, Graham Kerr said “We welcome the new agreement which further extends the long-term working relationship between South32 and Eskom. Hillside has been a major Eskom customer for 25 years and this agreement provides power cost certainty for a further ten years, with Eskom receiving a price aligned to long term tariff policy. Eskom also retains the current flexibility to interrupt supply to the smelter to support management of the national electricity grid and minimise load-shedding.

“The smelter remains an important contributor to South Africa’s economy, both directly through local employment and through its integration with significant downstream industries that rely on Hillside’s output. As the world transitions to a low carbon future, we will work with Government, Eskom and other potential partners to explore options to secure a green energy solution for Hillside.”