Afarak SA’s Mogale Alloys mine in Krugersdorp. Picture: FREDDY MAVUNDA
Afarak SA’s Mogale Alloys mine in Krugersdorp. Picture: FREDDY MAVUNDA

Natural resources giant Glencore has signed a deal with a Swedish clean-tech company to build a power-generation facility that will reduce emissions and cut power costs at its Lydenburg ferrochrome smelter.

The rising cost of power is a key concern of the SA smelting industry, which is taking significant strain over escalating electricity prices. With an effective tariff  hike of 13.81% granted to Eskom in 2019 alone — and more scheduled in the next two years — the pressure is on for energy-intensive businesses to adapt or die.

In a statement issued by Swedish Stirling, the company said the facility will reduce the carbon dioxide emissions from the smelter by more than 80,000 tons a year.

Though it has not disclosed the price at which the power generated will be sold back to Glencore, according to Swedish Sterling SA’s GM, David de Mattos, it will significantly undercut the price of Eskom’s power.

Swedish Stirling's offering, the PWR BLOK 400-F,  makes use of Stirling engines — an external combustion engine  as opposed to internal combustion and which is it better suited to the volatile nature of industrial waste gas.

It was successfully piloted at Afarak SA’s Mogale Alloys plant in Krugersdorp, where a fully developed power project converts the ferrochrome smelter’s very own waste gas into electricity for the plant.

Graphic: KAREN MOOLMAN
Graphic: KAREN MOOLMAN

In May this year Lloyd’s Register, a UK classification and certification group, certified PWR BLOK as the cheapest way in existence to generate electricity with greater carbon dioxide savings in SA than any other applicable type of energy source.

Swedish Stirling’s agreement with Glencore’s alloys division grants it exclusivity to negotiate an installation of a 9.9MW power generation facility at the Lydenburg smelter — enough to power almost 2,000 households.

The power generation facility will be owned and operated through a special purpose vehicle established and controlled by Swedish Stirling. At completion, it is estimated it will generate annual revenue of €3.75m for the company.  The project will also generate carbon credits during its lifetime. 

The deal is subject to definitive agreements being concluded between the parties and Glencore obtaining all required internal approvals. Swedish Stirling said it intends to secure finance for the facility in its entirety.

For one of the world’s largest commodity companies to invest in such a large commercial project is a true quality rating for the Swedish environmental technology industry, Gunnar Larsson, CEO of Swedish Stirling, said in a statement.

De Mattos noted that SA has the highest concentration of ferrochrome producers in the world with an estimated 200MW of unused furnace off-gas. “The implementation of PWR BLOK 400-F technology will provide relief from ever-increasing energy pricing as well as carbon emission displacement,” he said. 

steynl@businesslive.co.za