South32 revisiting ‘green’ Brazil
South32 is reopening an old aluminium smelter in Brazil, powered by renewable energy only.
This is significant as mining smelters use a lot of electricity.
In the case of aluminium, the process calls for smelting alumina and bauxite concentrate at 9500C for a few hours. Smelters need to be big enough to produce viable quantities.
South32 is restarting the Alumar aluminium smelter, also referred to as Brazil Aluminium, together with its joint venture partner Alcoa Corporation.
First production is expected in the June 2022 quarter.
Full production will be reached by March next year, when all three pots at the complex will be back in production to produce 447 000 tons of aluminium per annum.
Cost effective
South32 has a 40% share in Brazil Aluminium, with the company saying the cost effectiveness of renewable power will place the smelter in the second quartile of the global aluminium cost curve.
Brazil lends itself to this project as the country uses mostly renewable energy.
According to statistics from the US Energy Information Administration, 85% of its electricity is produced from renewable sources. Hydro-electric power stations produce 66%, 11% is produced by wind and solar, and eight percent comes from biomass power plants. The balance is nuclear and from fossil fuels.
A spokesperson for South32 confirmed the energy supply had been secured under long-term contracts, while alumina will be sourced from the Brazil Alumina refinery in which South32 holds a 36% interest.
The Brazil Aluminium plant has been on care and maintenance since 2015 and will require about $70 million (R1.1 billion) during the 2022 and 2023 financial years to restart operations, including capital expenditure of $10 million.
The smelter will ultimately be powered by 100% cost-efficient renewable power from a mixture of wind, solar and hydro power under long-term power contracts.
South32 chief executive Graham Kerr says: “With the smelter benefiting from existing infrastructure, access to our own supply of alumina and long-term green energy sources, we expect our investment to deliver strong returns through the cycle.”