| Fri 6 Feb 2004, 9:27 | | BHP Billiton looks to Africa for more success stor |
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BHP Billiton looks to Africa for more success stories
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Resources Correspondent
BHP Billiton (BHP), which officially opened its multimillion-dollar Hillside aluminium expansion operation this week, is examining other opportunities to grow its aluminium operations in both SA and Mozambique.
BHP Billiton chairman Don Argus, speaking at the Hillside 3 opening ceremony at Richards Bay, said the company had started a project to examine what opportunities there might be to add value to its southern African aluminium operations.
Argus said that decisions to add capacity were in the early stages.
Chip Goodyear, CEO of BHP, the world's biggest mining company resulting from a merger in 2001 between Australian company BHP and SA's Billiton, was also in the country for the opening.
Goodyear said that before any decision on expansion could be made, the issue of an affordable supply of power had to be resolved.
The importance of access to electricity for any expansion is clear and the company has suggested that any future expansion may see BHP as the major customer underpinning future development of electricity generating capacity in southern Africa.
BHP Billiton, however, did not rule out the possibility that it could become involved more directly in power generation in "one way or another", according to Mike Salamon, BHP Billiton's president of aluminium.
"Direct investment (in power generation) is not our core business. On the other hand, we are involved in power generation," said Salamon.
The company has the capacity to produce 1,3-million tons of aluminium a year; 7% of total global aluminium production comes from its Hillside and Bayside smelters in SA and Mozal in Mozambique.
The $449m Hillside project was 38m under budget, and increased the smelter's production capacity by 132000 tons of aluminium a year to 670000 tons a year.
BHP Billiton is based in Melbourne, Australia, but about 20% of its assets are in southern Africa.
These assets include coal, manganese, ferrochome and aluminium operations.
Goodyear gave little away on his views about the new regulatory environment in SA with the passing of the Minerals and Petroleum Resources Development Act, saying only that as a global commodities firm, BHP Billiton was used to dealing with different regulatory environments.
Argus said, though, that "economics will determine what is fair and what is not", implying that countries which wanted to attract investment had to create a climate in which companies could compete successfully with domestic and global competitors.
