Mining group BHP Billiton said today that operating its three southern
African aluminium smelters on lower power because of a shortage was "unsafe and
unsustainable" in the long run.
BHP, the world's sixth-biggest producer of primary aluminium, said it was
weighing its options on how to sustain the plants, and was in talks with power
utility Eskom on how to achieve this.
Aluminium prices hit a 21-month peak today, on market rumours the miner had cut
output further at its smelters. BHP owns two smelters in SA and one in
Mozambique.
SA's mining companies were ordered last month by state-owned Eskom to cut power
usage by 10% to help solve a power crisis.
"This method of operating is unsafe and unsustainable in the long term," Bronwyn
Wilkinson, BHP's Johannesburg spokeswoman, said.
"BHP Billiton has investigated several possible options to maintain the
mandatory 10% power reduction over a period of years and run its business in a
safe and sustainable manner."
"These are being discussed with Eskom and we are not able to disclose the
contents of those discussions," said Wilkinson.
BHP's London-based spokesman Illtud Harri also declined to give details on the
talks.
Eskom spokesman Andrew Etzinger said: "To the best of my knowledge, there has
been no agreement to vary the 10% reduction requirement.
"There have been a number of customers, who have taken that position, saying
that it is unsafe or unsustainable to operate with 90% power supply and we are
in discussions with such companies."
BHP said late last month it would gradually reduce power usage to 90%. Aluminium
smelters such as BHP's Hillside and Bayside operations in SA and Mozal in
Mozambique are among the biggest industrial consumers of electricity.
Gold producer Gold Fields, which said on Monday it may have to cut 6 900 jobs at
its mines as it scales down output owing to the power crunch, has also said it
would seek to raise its electricity use to 95%.
Mines say Eskom has indicated the 90% limit could remain in place until 2012,
when the power utility has said it expects more electricity generation capacity
to come onstream.
Eskom has been unable to meet fast-growing demand for power, leading to
blackouts to protect the grid from collapse, and has warned the power problems
would affect the economy for five years until new generation capacity comes
onstream.
With acknowledgements to Reuters and Business
Day.
Like I said 6 odd weeks ago ..................
One can take Billiton's statement that "operating its three southern African
aluminium smelters on lower power because of a shortage was unsafe and
unsustainable" as a forerunner to a damages action for its upcoming losses.
What is going to happen to Rio Tinto Alcan's aluminium smelter at Coega?
In the meantime Business Day will not even acknowledge receipt of my letter
analysing the whole Southern African aluminium smelter debacle, let alone
publish it.
This mess is in the hands of Alec Erwin and he needs to take a hike down cocaine
alley.
Fast freight (to ruination) along the white (powder) route.
Apparently, sprinkled finely it gives delusions of strategic grandeur.