BHP to Halt Some Production at Bayside Aluminum Plant (Update1)

June 30 (Bloomberg) -- BHP Billiton Ltd., Africa’s biggest aluminum producer, will stop some output at its Bayside smelter in South Africa at the end of September as demand weakens. “Bayside has experienced a sharp decline in domestic demand,” spokeswoman Bronwyn Wilkinson said in an e-mailed response to questions today. The smelter will stop so-called casting rod and billet, and keep supplying slab metal, she said. Manufacturing in South Africa shrank a record 22.1 percent in the first quarter as the economy contracted by an annualized 6.4 percent and the country entered its first recession in 17 years. London-based BHP, which employs about 600 full-time staff at the plant and about 300 contractors, is talking with workers’ representatives about the output cuts, Wilkinson said. Hulamin Ltd., a South African aluminum processor, today said BHP agreed to supply it with raw materials until December 2010. About half of its extrusion billet and 30 percent of its rolling slab is supplied from BHP’s Bayside plant, Hulamin said. BHP said April 23 that aluminum output fell 7 percent in the nine months ended March 31 as power rationing was introduced in southern Africa. Eskom Holdings Ltd., South Africa’s state- run utility, began rationing electricity to avoid outages as the company struggled to keep up with demand from industry. To contact the reporter on this story: Ron Derby in Johannesburg at rderby1@bloomberg.net