LETTER: The cons of the Hillside smelter
At such a critical time, it seems grossly negligent to even consider selling substantial electricity to Hillside to refine a commodity that is imported
"Going South?" (Features, March 14-20) introduces important facts about SA’s aluminium industry.
As the 2013 court case involving Media24 and Eskom showed, it was in the interests of Hillside and Eskom to keep the details of their deal — a loss-incurring one for Eskom — unknown to the public. Now, Eskom is short of generation capacity. The cost to the economy of load-shedding is astronomical. And the power utility is unable to say how long this shortfall will continue. At such a critical time, it seems grossly negligent to even consider selling substantial electricity to Hillside to refine a commodity that is imported.
There would be no disadvantage to the downstream aluminium industry if Hillside were not in operation — particularly if one takes into account that the similar-sized Mozal smelter is "just down the road".
Hulamin and the Aluminium Federation of SA claim 29,000 jobs in the downstream industry are at risk if the smelter shuts down. But one has to ask Hulamin for its definition of support. Its customers in Singapore, Europe or the US have paid substantially less for rolled product from its plant in Pietermaritzburg than have local customers. What kind of support is this?
At the same time, the biggest consumer of aluminium in SA, Mercedes-Benz, imports aluminium body sheets for its C-class from Europe because Hulamin doesn’t produce them in the required quality.
Also, it’s possible to have a substantial downstream industry without a smelter: look at Japan or Thailand. And having a smelter doesn’t necessarily mean a vibrant downstream industry (consider Russia).
It’s time to look at the bigger picture.
MD of MTT, Kempton Park
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