By Dow Jones Business News,
January 20, 2014, 10:15:00 AM EDT
By Alex MacDonald
LONDON--Mining titan BHP Billiton Ltd (BHP) said Monday that it has begun a formal consultation with its employees to
cease smelting activities at its ailing South African Bayside aluminum smelter.
Aluminum producers have been cutting back on production over the past year due to depressed aluminum prices stemming
from excess production capacity, particularly in China. Rival Rio Tinto PLC (RIO) said in November it would suspend an
alumina refinery in Australia due to weak market conditions while U.S.-based Alcoa Inc ( AA ) announced last week plans to
permanently shut down two potlines at an aluminum smelter in New York. Alumina is a semi-finished product used to make
BHP didn't provide a timeline for when the consultation period would end but BHP's South Africa Vice President of
Communications and Stakeholder Relations Lulu Letlape said "We are focused on mitigating the impact of potential job
losses while ensuring the existence of a sustainable aluminum business in Richard's Bay."
BHP intends to shut the plant's smelting activities but keep the facility's cast house operational. BHP will supply
material from BHP Billiton's neighboring Hillside smelter to the cast house while it assesses future options, the
The Bayside aluminum smelter employs 450 people and is able to produce 97,000 metric tons of aluminum annually.
Analysts at Investec Securities said in a note that the "closure would have a small positive impact on the aluminum
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