Johannesburg - Hulamin surged after South Africa’s biggest aluminum-product maker said it is part of a group that will buy BHP Billiton’s casthouse at the Bayside smelter, which the world’s biggest miner earmarked for closing.
The company will have a 40 percent stake in Isizinda Aluminium, while Bingelela Capital, a group of black investors, will own the rest, the Pietermaritzburg, South Africa-based Hulamin said in a statement today.
The manufacturer will operate the casthouse from which it will source more than 10 billion rand of aluminum slab over the next five years, it said.
The agreement “will secure our rolling-slab supply from Bayside for the next five years,” Hulamin said.
“It will also see the creation of an aluminum hub in Richards Bay.”
The stock rallied as much as 9.6 percent, the biggest intraday gain since May 12, to 7.40 rand and traded 6.4 percent higher at 7.18 rand by 9:09 am in Johannesburg, with more than 352 000 shares traded, or 28 percent higher than the daily average over the last three months.
Global aluminum capacity closures may reach 2 million metric tons in 2014, the equivalent to 4 percent of global production, Bloomberg Intelligence said in an October 10 report.
BHP will supply the Bayside casthouse from the nearby Hillside smelter.
The South African government wants more of the country’s raw materials processed locally by black-owned companies in a process known as beneficiation. - Bloomberg News