Mining giant BHP Billiton has started talks with employees at its Aluminium SA business on the proposed cease of aluminium smelting and associated services at its Bayside smelter at the port of Richards Bay in KwaZulu-Natal, South Africa.

The Bayside aluminium smelter presently employs 450 people and produces 97,000t of aluminium each year.

BHP intends to shut down the plant’s smelting activities but the facility’s cast house will remain operational.

The company said it will supply material from its neighbouring Hillside smelter to the cast house, while it assesses future options.

A fall in aluminium prices has prompted several producers to cut production over the past year.

"We are focused on mitigating the impact of potential job losses while ensuring the existence of a sustainable aluminium business in Richard’s Bay."

BHP noted that the consultations are part of the mining company’s strategy to minimise the impact of any changes on employees and the downstream industry in South Africa.

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BHP South Africa’s vice-president of communications and stakeholder relations Lulu Letlape was quoted by Bloomberg as saying: "We are focused on mitigating the impact of potential job losses while ensuring the existence of a sustainable aluminium business in Richard’s Bay."

The Anglo Australian mining company headquartered in Melbourne, Australia, said the closure of the Bayside smelter will have greater cost implications for South Africa’s downstream metals industry.

"BHP Billiton has been in on-going discussions with its stakeholders to discuss the challenges faced by the business, explore options for the Bayside operation and ensure a sustainable aluminium business can operate in Richards Bay and South Africa," Letlape added.

"To support the ongoing supply to…local customers, the cast house within the Bayside operation will continue to operate with supply from BHP Billiton’s neighbouring Hillside smelter while we assess options for its future."

BHP Billiton has two aluminium smelters at Richards Bay, Bayside and Hillside, along with a third smelter, Mozal, near Maputo in Mozambique, which produces about one million tonnes of aluminium every year.