BHP Smelters Affected by Eskom’s Crisis Again

South African power availability deteriorated again sharply recently with the state-run power producer Eskom having to implement wide-ranging load shedding across the country. Wet coal that less efficient to burn and aperiodical malfunction meant that Eskom had 18 generator units off-line at one stage. Eskom cut supplies by 1,000MW to the country’s cities yesterday, because supplies are in the brown zone, which is the most critical of four colour-coded levels Eskom uses to assess the availability of electricity. The zones are green, orange, red and brown. When it reaches brown, Eskom starts reducing supply. BHP Billiton’s three aluminum smelters in the country are dependent on Eskom power supplies, and since late January it has been confirmed the possibility that it would experience more load-shedding above the 10% cut in power usage in place. The company said last week it would limit the production impact of the 10% power cut, which is expected to last a number of years, to 120,000tpy by concentrating it on the older Bayside smelter in South Africa. With 1.5 million tpy of capacity at Bayside, Hillside and Mozal in Mozambique, the cut would have meant 150,000tpy of production loss. However, sources said at the time of BHP Billiton’s announcement that the situation would remain highly unstable due to the continued operating problems at Eskom.