RICHARDS BAY, May 10, 2026, 23:05 (SAST)
South32 Ltd is aiming to secure a new electricity agreement for its Hillside Aluminium smelter by around 2029, as the Australian miner tries to avoid a repeat of the power-price dispute that shut its Mozal operation in Mozambique. Chief Executive Graham Kerr told journalists at Hillside’s 30th anniversary event that the Richards Bay plant could run another “20-30 years” if it gets a competitive contract, Business Day reported. Business Day
The timing matters. Hillside’s discounted Eskom power deal ends in 2031, and aluminium smelters need large, steady supplies of electricity; without affordable power, plants can quickly become uncompetitive. South32 placed Mozal on care and maintenance on March 15 after failing to secure sufficient and affordable power, Reuters reported.
Hillside is not just another asset in South32’s portfolio. South African officials say the smelter supports 3,650 direct and indirect jobs, underpins an estimated 29,000 jobs across the economy and supplies the local aluminium industry, including firms that turn primary metal into finished products.
Eskom and South32 said they had set up a joint working group to examine renewable power for Hillside, backed by “firming capacity” — backup supply that can keep electricity flowing when wind or solar output falls. South32 Chief Operating Officer Noel Pillay said the goal was a “viable, low-carbon energy solution” from 2031, while Eskom CEO Dan Marokane said the talks should support industrial competitiveness and a lower-carbon grid. Eskom
President Cyril Ramaphosa used the anniversary event to cast the plant as an industrial anchor. He welcomed South32’s R3.9 billion pledge to upgrade rail infrastructure in KwaZulu-Natal and the Northern Cape, and said energy and logistics reliability would remain central to South Africa’s industrial competitiveness.
Hillside began operating in 1996 and is the largest aluminium smelter in the southern hemisphere, with annual capacity of 720,000 metric tons, Reuters reported. It consumes power around the clock, making the tariff — the price paid for electricity — the core commercial issue, not a side item.
The pressure on South32 has a broader industry read-through. Rio Tinto in March reached a government-backed arrangement to keep its Boyne aluminium smelter in Queensland competitive beyond a 2029 power contract, while Alcoa said in February it was looking to sell closed or curtailed sites to data-centre users as power-linked industrial land gained value.
But the risk is that a deal takes longer than expected or fails to clear regulatory and pricing hurdles. Eskom and South32 said any post-2031 solution is subject to regulatory requirements; the Mozal case shows how a long negotiation can still end in mothballing, a term used for stopping production while keeping a site intact enough to restart.
South32’s near-term case is plain: Hillside ties power, jobs and local aluminium supply together. The harder question is who pays for the power shift, and at what price. The answer will shape whether Hillside remains a South African industrial showcase or becomes another warning from the smelter market.
