[DEBATE] : South Africa - Shut down the aluminium smelters - A new power station online?

[Riaz K Tayob]

Shut down the aluminium smelters


Jaxon Rice, “Thought Leader”, 26 January 2008

Friday’s news that South Africa’s gold and platinum mines had been 
forced to suspend operations because Eskom could no longer guarantee the 
power supply has emphasised just how bad our electricity crisis has 
become. We can switch off lights, swimming pool pumps and geysers to our 
heart’s content but the reality is that we need immediate access to more 
power and I would suggest that one way to do this would be to shut down 
BHP Billiton’s three aluminium smelters

Aluminium is jokingly referred to by some in the industry as molten 
electricity and it is not hard to see why. Between them the Richards 
Bay-based Hillside and Bayside smelters and the Mozambique-based Mozal 
smelter employ around 7 000 employees and contractors and use 2 150MW of 
electricity, around 5,5% of Eskom’s total capacity.

These aluminium smelters operate on our coasts because they have 
contracts guaranteeing a supply of the cheapest electricity in the 
world. For the most part, alumina is shipped in from BHP Billiton’s 
operations in Australia and Brazil, processed at the smelters and 
shipped directly out again to their end destination. They need a 
constant supply of power — load-shedding can be disastrous to these 
operations, resulting in whole potlines having to be replaced at a cost 
of hundreds of millions of dollars.

Here’s what I think the government should do:

* Shut down and mothball the Hillside, Bayside and Mozal smelters as 
quickly as possible. These smelters face disruptions anyway, and there 
may be benefits in shutting down operations in a orderly manner.
* Pay the full salaries of every single employee and contractor for as 
long as these operations are down.
* Give BHP Billiton whatever penalties/tax breaks it needs so that 
shutting these operations down do not effect their profit margins.
* Cancel the ill conceived 1 150MW Rio Tinto Alcan smelter that is 
planned for Coega in 2010. Pay the fines and penalties for cancelling 
this operation.


This move would not be popular with BHP Billiton or Rio Tinto, but it is 
time to make pragmatic decisions that will benefit the whole economy. By 
doing this we could bring the equivalent of a Koeberg power station 
online within a few months. This, combined with the other power saving 
suggestions, could be enough to minimise the effects of load-shedding on 
the mines, factories and small businesses that power our economy and 
save us from the mass layoffs and closures that are likely to happen if 
the current situation prevails.

From: 
http://www.thoughtleader.co.za/jaxonrice/2008/01/26/shut-down-the-aluminium-smelters/