Hulamin secures long term slab supply from Bayside

Shareholders have been advised that Isizinda Aluminium has announced the acquisition of the Bayside casthouse in Richards Bay, KwaZulu Natal, from BHP Billiton. The effective date is expected to be 1 April 2015, subject to Competition Commission approval.

Isizinda (meaning Hub in isiZulu) is a strategic partnership between Bingelela Capital and Hulamin. Bingelela Capital, a KZN based BEE group, owns a majority 60% stake in Isizinda. Hulamin holds 40% and will also provide managerial, technical and administrative support to Isizinda in terms of a strategic operator agreement.

Isizinda has concluded a groundbreaking five year metal supply agreement with BHP Billiton that will see liquid metal supplied by the nearby Hillside smelter directly to the Bayside casthouse. Hulamin, in turn, has concluded a matching slab offtake agreement with Isizinda, with an estimated value of more than R10 billion over the five year period.

David Austin, Acting CEO of Hulamin commented: “We are really excited about the transaction, which was only made possible by all parties’ close co-operation. Not only will it secure our rolling slab supply from Bayside for the next five years and beyond but it will also see the creation of an aluminium hub in Richards Bay. This hub has the potential to supply liquid metal and/or castings to other manufacturers in the South African aluminium industry, thereby stimulating growth in downstream beneficiation.”

BHP Billiton will continue to operate the Bayside casthouse and to supply slab to Hulamin on an interim basis, until Competition Commission approval is granted and the acquisition is implemented.