Up to 500 jobs on the chopping block to keep Hillside smelter afloat
South32 says the aluminium smelter is struggling to compete because of high wages and low productivity
A high wage bill and low productivity at South32’s Hillside aluminium smelter have led the diversified miner to start a retrenchment process which could affect up to 500 jobs. This comes at a difficult time for SA’s steel industry, which has been haemorrhaging jobs in recent years, losing 8,000 in 2018 alone. Speaking to Business Day on Monday, COO Mike Fraser said the Richards Bay smelter had “burnt quite a lot of cash” in the six months ended December. Absolute salary levels on site are “very high” while productivity is “too low” compared to the rest of the world, he said. South32 was spun out of BHP Billiton in 2015. The aluminium smelting industry is highly competitive, margins are relatively thin and the majority of costs are outside of a company’s control, Fraser said. Labour costs at Hillside, however, account for about 50% of what the South32 deemed “controllable costs”. “Over 20 years we’ve probably bent over backwards to avoid any kind of industrial action. I think we just...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.