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Johannesburg - BHP Billiton (BIL), the world's largest resources group, will begin the ramp down of potlines at Bayside Aluminium in Richards Bay next Tuesday after no feasible alternatives to
their shutdown were found.
In a statement released on Thursday, the company said the ramp-down process would take about two months to complete.
BHP Billiton, which has interests in three aluminium smelters in
southern Africa, said last week that it might have to close its B and C potlines at Bayside because of power restrictions in SA.
The decision to go ahead follows consultations with employees and their representatives over possible alternatives.
"This decision comes as a result of the inability of the SA electricity utility, Eskom, to supply sufficient power to meet demand. BHP Billiton has, on instruction from Eskom, reduced its power consumption by 10% across the company's three smelters in southern Africa," BHP Billiton said.
"However, this operating methodology is unsustainable and we undertook an assessment of options to deal more effectively with a longer-term reduction in power," it added.
In addition to the closure of the potlines, the Hillside and Mozal smelters will reduce operating levels to comply with the 10% mandatory overall power demand reduction.
The Bayside and Hillside smelters in Richards Bay are both 100% owned by BHP Billiton, while it has a 47.1% stake in Mozal in Maputo, Mozambique.
Total annual production loss will be just over 120 000 tonnes across all three smelters, including approximately 92 000 tonnes from Bayside.
While the company has not confirmed the number of jobs that will be lost as a consequence of the closure, an estimated 400 permanent employees and 500 contract employees were expected to be affected.
"Consultations with employees and their representatives will continue regarding efforts to minimise the impact of this process on our people," the company concluded.
At 15:10 shares in BHP Billiton were trading R12.50 lower at R222 on the JSE.
- I-Net Bridge