BHP Billiton’s African expansion

11 February 2004

Global resources giant BHP Billiton officially opened its multi-million dollar Hillside aluminium expansion project in KwaZulu-Natal last week, and is exploring further opportunities for growing its aluminium operations in South Africa and Mozambique.

The expansion project at BHP Billiton’s Hillside Aluminium smelter at Richards Bay reached full production in December, just 20 months after the project commenced in April 2003, at a total cost expected to come in under the original budget of US$449-million.

This expansion, by 132 000 tons per annum, will raise Hillside’s production to 670 000 tons per annum, making it the largest smelter in the southern hemisphere and the western world.

According to the company, some 1 200 people received training in various construction skills during the project. “About $80-million was spent directly in the KwaZulu-Natal region, with a further spend of $7-million per annum expected from the expansion’s continuing operations”, the company said in a statement.

“To date, 22 contracts valued in total at US$20-million have been awarded to black economic empowerment procurement and service providers.”

Business Day reported that BHP Billiton chairman Don Argus, speaking at the Hillside 3 opening ceremony at Richards Bay last week, said the company had begun a project to explore opportunities for adding value to its southern African aluminium operations.

BHP Billiton accounts for approximately 7% of total global aluminium production from its Hillside and Bayside smelters in South Africa and its Mozal smelter in neighbouring Mozambique.

Roughly 20% of the Australia-based company’s assets – including coal, manganese, ferrochrome and aluminium – are in southern Africa. The company, the biggest mining company in the world, resulted from the merger in 2001 of Australian firm BHP and South Africa’s Billiton.

Earlier this month, the group appointed Dr Vincent Maphai, currently corporate affairs director at SABMiller, as chair of BHP Billiton South Africa.

Maphai will be the most senior group executive located in southern Africa, and will report to BHP Billiton executive director Mike Salamon.

Salamon said in a statement that southern Africa “is a core element of our global business activities, and Dr Maphai’s experience and stature will hold us in good stead as we progress our empowerment initiatives and seek development opportunities throughout the region.” reporter