Mining Weekly Online
written by Martin Creamer

RICHARDS BAY (miningweekly.com) – BHP Billlton’s aluminium business in Richards Bay has voluntarily put 130 MW back into the South African power grid.

BHP Billiton South Africa communications and external affairs VP Johnny Dladla told a visiting media contingent hosted by Aluminium South Africa asset president Gustav Griessel that the company is one of the few in South Africa that cut electricity consumption but did not claw it back.

But not making use of this electricity has come at a high price in terms of job losses, Griessel tells Mining Weekly Online.

It has meant the loss of 400 permanent direct jobs and some 300 contractor jobs, which in terms of the multiplier effect touches the lives of an estimated 3 000 people, says Econometrix MD Rob Jeffrey, who delivered a presentation on the significant benefits to the South African economy of megaprojects like the Hillside aluminium smelter.

The job losses are the result of the closure of the B and C potlines at the Bayside aluminium smelter.

Also lost is about 90 000 t a year of primary aluminium, which basically halved Bayside’s output. All of the current Bayside output is supplied to the South African market.

The nearby Hillside smelter is currently producing 710 000 t a year, of which the bulk is exported as ingot, with the rest going into the domestic market.

“We are doing everything in our power to operate the smelters as efficiently as possible to ensure that we continue to operate as one of the top aluminium smelters in the world in terms of efficiency,” Griessel tells Mining Weekly Online.

The aluminium price has not been tracking the upward trend of other commodities, participation in the industry by China and the Middle East is a threat that is looming large, and the issue of a carbon tax is likely to negatively impact energy-intensive businesses, including South African Aluminium.

Griessel reports that the local aluminium industry is under intense cost pressure arising from the increased prices of raw materials, including petroleum coke.

South African Aluminium buys as much as possible locally, including liquids pitch from ArcelorMittal South Africa.

The BHP Billiton subsidiary imports alumina from Western Australia and petroleum coke from the US Gulf and the East.

The business currently employs 1 200 people at Hillside and 450 people at Bayside.