What's Happening?
South Africa's Hillside Aluminium smelter in Richards Bay reported a 1% increase in production to 181,000 tons for the quarter ending September 30, 2025, as it continues to test its maximum technical capacity.
South32, the company operating the smelter, has maintained its production guidance for the 2026 financial year at 720,000 tons. Meanwhile, South32's manganese production decreased by 7% due to underground development activities at the Wessels mine. Despite this, the company reported a 33% increase in manganese volumes, contributing to cash generation. Mozal Aluminium in Mozambique also saw a 3% production increase, although future operations are uncertain due to electricity supply issues.
Why It's Important?
The steady production at Hillside Aluminium is crucial for South32 as it seeks to maintain its operational momentum and capitalize on market conditions in base metals. The company's ability to sustain production levels amid capacity testing reflects its strategic focus on operational efficiency. However, the uncertainty surrounding electricity supply for Mozal Aluminium highlights the challenges faced by industries reliant on stable energy sources. The potential impact on Mozal's operations could affect regional economic stability and employment. South32's efforts to secure electricity supply underscore the importance of energy security in industrial operations.
What's Next?
South32 is actively engaging with the Mozambique government and energy providers to secure electricity for Mozal Aluminium beyond March 2026. If successful, this could ensure continued operations and production stability. However, failure to secure energy supply may lead to Mozal being placed on care and maintenance, affecting production and employment. South32's ongoing investment in growth at Hermosa and its focus on strengthening market conditions in base metals suggest a strategic approach to navigating these challenges. The company's climate change action plan may also influence future operational decisions.
Beyond the Headlines
The situation at Mozal Aluminium highlights broader issues of energy security and its impact on industrial operations. As companies like South32 navigate these challenges, there may be increased pressure on governments to ensure reliable energy infrastructure. The focus on climate resilience and emissions reduction in South32's action plan reflects a growing trend among industries to address environmental concerns while maintaining production efficiency. These efforts may lead to long-term shifts in how companies approach sustainability and operational resilience.
