Smelter allays retrenchment fears
SOUTH32 has allayed concerns of possible retrenchments at the Hillside Smelter in Richards Bay as part of cost cutting measures.
The company said the financial management initiatives currently being undertaken at the smelter are in line with normal business practices in order to remain sustainable throughout commodity price cycles.
The Zululand Observer is in possession of a letter handed to staff members stating plans to freeze 17 vacancies with an equivalent monetary value of R13.6-million in order to support the company’s financial sustainability and cost saving goals.
However a company spokesperson said despite cost challenges, Hillside expects to achieve a record production of 720kt of aluminium in the financial year ending 30 June 2019 as it continues to test its technical capability.
‘Our South Africa Aluminium business which consists of the Hillside Aluminium smelter in Richards Bay, has a highly variable cost base which is heavily influenced by the price of power and raw materials.
‘Operating unit costs increased by 26% in the financial year ending 30 June 2018 owing to a significant rise in raw material costs.
‘South32 achieved record production at Australia Manganese and Mozal Aluminium, delivering a 10% increase in total manganese ore production and a 20% increase in payable nickel production at Cerro Matoso.
‘The fully integrated aluminium supply chain benefitted from tight markets by virtue of the predominantly index-linked 3.2 million tonne long alumina position.
‘We expect Hillside’s raw material costs to remain elevated in the current financial year.’
The spokesperson said Hillside management will however, continue to look for opportunities to manage and improve its profitability.
‘The smelter remains a key contributor to local community development, skills development and entrepreneurial support, including small businesses in our supplier pipeline,’ the spokesperson said.
South32 Hillside Smelter in Richards Bay