BHP seen selling smelter to Hulamin

Johannesburg - The National Union of Metalworkers of South Africa said BHP Billiton Ltd. may sell its Bayside aluminum smelter, which the world’s biggest miner has earmarked for closure, to Hulamin Ltd.

“We do hear that they have an interest in buying that smelter,” Mbuso Ngubane, Numsa’s regional secretary for the KwaZulu-Natal province, said today by phone, referring to Hulamin, a manufacturer of finished aluminum products.

The union has members at both operations.

BHP plans to cease smelting at the Bayside operation in the northeastern port of Richards Bay, it said in a January 17 statement, citing “significant and ongoing financial pressure.” Lulu Letlape, a spokeswoman for BHP Billiton, and Johannes van Niekerk, a spokesman for Hulamin at CapitalVoice, declined to comment when contacted by phone today.

Aluminum’s cash settlement price decreased by 6 percent during BHP’s 2013 fiscal year, the company said in its latest annual report.

Demand for the metal slowed while new supply continued to be added, which contributed to an increasing market surplus.

Hulamin on January 16 said it started talks with BHP over the future supply of aluminum slab from the Bayside smelter’s casthouse, where it sources a third of its requirement.

BHP would keep a casthouse at Bayside open after smelting has been halted.

Bayside produced 96,000 metric tons of aluminum in the year through June 2013, or 8.1 percent of the group’s total production. - Bloomberg News