Mining group BHP Billiton will phase out annual business with Standard Bank in the first corporate spat brought on by South Africa’s power crisis.
Business Day reported that the business may be worth R2,4-billion and the decision to cut ties with Standard Bank came after a bank executive suggested that one of the mining group’s aluminium smelters be shut down to save electricity.
”I can confirm that BHP Billiton has taken a corporate decision to phase out its business with Standard Bank,” spokesperson Bronwyn Wilkinson said.
She declined to give further details.
Standard Bank said in a statement that it had received correspondence from BHP Billiton related to the ”national electricity challenge”.
”Standard Bank has a valued relationship with BHP Billiton having provided it with a range of banking services for many years, and we will engage with BHP Billiton on this particular matter as a part of this relationship,” the banking group said.
Business Day cited a letter sent to employees by BHP Billiton South Africa chairperson Vincent Maphai, which said remarks by an unnamed Standard Bank executive were reckless.
Business Day said the remarks were made at a meeting between business and government at which South Africa’s power crisis was discussed.
BHP Billiton said on March 11 it would halve operations at its Bayside smelter while Hillside in South Africa and Mozal in Mozambique would operate on 90% of their power needs.
South Africa’s mining companies were ordered in January by Eskom to cut power usage by 10% to help solve the power crisis that has driven up metals prices and slowed the country’s growth. It prompted some mining companies to cut production forecasts and warn of job losses.
Since then power consumption at some mining firms has been allowed to creep up to 95% of full power.
Business Day said the termination of business with Standard Bank will be phased in, beginning with money market accounts, foreign exchange and guarantees, and had been taken with full support of BHP Billiton CEO Marius Kloppers. — Reuters