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PIETERMARITZBURG-BASED aluminium giant Hulamin has wrapped up a multi-billion deal in Richards Bay with a massive BEE component — and it believes more opportunities in Zululand are not far off.
The deal, signed yesterday in the Northern KZN port city of Richards Bay, saw the newly formed Isizinda Aluminium, a partnership between Bingelela Capital and Hulamin Limited, take transfer of the Bayside casthouse from South32 (formerly known as BHP Billiton Aluminium South Africa).
Hulamin will be Isizinda’s primary client who will supply them with 96 000 tons of rolling slab.
Bingelela Capital is the majority shareholder of Isizinda with a 57,5% shareholding, while Hulamin holds a minority stake of 37,5%. The remaining five percent shares will be made available to an employee share ownership plan.
Isizinda CEO Sizwe Khumalo, a stalwart of the aluminium sector, said while Hulamin will now be guaranteed surety of supply, the deal will have a massive impact on the uMhlathuze’s local economy.
“This is a wholly-owned South African company, beneficiating a raw product for the South African market. Making sure we beneficiate local resources is a vision both me and South32 agree on. We hope to expand our operation in the future,” said Khumalo.
He said they have signed an estimated R10 billion, five-year deal with South32 who, through their smelter in Richards Bay known as Hillside, will supply them with liquid metal to the casthouse which will be cast into rolling slab before being sent to Hulamin for semi-fabrication.
The purchase of Bayside by Isizinda was given the go-ahead by the Competition Commission in May but just what they paid for the facility has been kept confidential.
CFO of Hulamin David Austin called the deal “exciting”.
“We already import about 100 000 from South32 to our Pietermaritzburg casthouse but this involves transporting aluminium ingot and then remelting it. At Isizinda, liquid aluminium is transported to the casthouse roughly one kilometre away from the smelter and then beneficiated.
“The positive is that we save energy. This hub in Richards Bay has the opportunity to attract other castings, which is something we are already exploring,” said Austin.
Hulamin is expected to provide strategic support for Isizinda and assume responsibility for achieving rolling slab production goals.
Pietermaritzburg Business Chamber chairperson Melanie Veness praised Hulamin for being “proactive” in a tough economy.
Zululand Chamber of Commerce and Industry president Judith Nzimande said the establishment of the “new venture follows years of negotiations by various parties”. “The presence of the Isizinda Aluminium will lead to 80 jobs being preserved and hopefully unlock more job opportunities in the future.”
