BHP falls out with Standard Bank

BHP Billiton, the world’s largest miner, is changing banks as an indirect result of the South African power crisis.

The group has been carrying out annual business with Standard Bank (worth more than $300 million) for a number of years.

However, it transpires that a senior executive at Standard Bank attended a meeting between the South African Government and business leaders, during which he suggested that BHP Billiton’s Hillside aluminium smelter should be shut down to ease electricity supplies.

In January of this year, South Africa’s mining companies were ordered by state-owned utility company, Eskom, to cut power usage by 10%.

BHP already has plans to halve operations at its Bayside smelter, while Hillside in South Africa and Mozal in Mozambique will continue to operate on 90% of their power needs.

A BHP spokeswoman has confirmed that the company is seeking other banking partners. The group has expressed disappointment at the executive’s “apparent ignorance of the issues at hand”, calling the remarks “reckless, provocative and irresponsible”.

The bank has responded by saying: “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.”