Chemicals and explosives group AECI has made progress in its effort to reduce electricity supply risks to its business and to prioritise renewable energy alternatives, having completed the first phase of its solar installations.
The R11bn JSE-listed company said on Thursday that it had installed and commissioned a 1MW solar project at Chem Park, its AECI chemicals manufacturing site in Johannesburg, marking the first stage of a four-phase programme that will ultimately see 14.3MW per year of solar-powered electricity generated at selected operating sites in SA.
With R145m earmarked for investment in group solar energy projects in 2023, the company told Business Day that the projected total of the first phase was R21m.
AECI said another two renewable energy installations are scheduled for commissioning within the first quarter of 2024 at major production facilities.
When concluded, AECI Mining Chemicals in Sasolburg is scheduled to bring 1.5MW online, while AECI Mining Explosives, in Modderfontein, will commission 4MW of energy supply.
“Both sites play key roles in our country’s mining sector value chain,” AECI CEO Holger Riemensperger said, adding that these initiatives would strengthen the company’s ability to supply products and services to its customers in SA.
The Johannesburg-based company's operating business segments include AECI Mining, AECI Water, AECI Agri Health and AECI Chemicals.
It competes in the chemicals sector against bigger rivals such as Sasol and Omnia.
In the six months to the end of June, AECI said finance costs had weighed on its interim performance, with headline earnings per share increasing only 5%.
The chemical maker slashed its dividend payout from 194c to 100c, saying it was prioritising a reduction of its gearing.
AECI is also in the process of reviewing its operations to design a new growth strategy which it will unveil in November, while it hunkers down to lower its R5.7bn debt pile, which is equal to more than half its market value.
On Thursday the group said its solar alternative plan, which the board approved in 2021 is in line with AECI’s environmental, social and governance (ESG) and broader sustainability targets, which include reducing its reliance on fossil fuels and limiting its carbon footprint.
Riemensperger said climate change is one of the most complex and pressing issues facing humanity, and a decrease in the use of fossil fuels contributes to the positive effect on the overall carbon footprint of this industry.
Highlighting that “it is critical that businesses devise appropriate response strategies”, Riemensperger said, “AECI, therefore remains committed to pursuing a greener business footprint and delivering sustainable solutions for a better world”.
AECI’s four-phase plan stipulates solar electrification of key areas in the first phase followed by scaling solar electrification up to required capacity for key identified areas.
The third phase will include an assessment of battery storage, energy generation and distribution with the last phase focusing on green energy supply through PV electrolysis and green ammonia through available land use, it said.
In May 2022, AECI Mining Explosives launched SA’s first electric mobile charging unit. It said the vehicle, when used in combination with renewable energy sources, such as solar power and hydropower, would lower emissions and require less maintenance. At the same time, mine ventilation and cooling requirements would reduce while enabling safer operations.
AECI’s share price rose 0.48% to R105 on Thursday having climbed over 19% in the year to date.
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