BHP Billiton Moving Alumina Pricing Away From Historical Way
October 08 2009 - 5:07AM
Dow Jones News
BHP Billiton PLC (BHP) is moving its alumina pricing away from
the traditional method of benchmarking it as a percentage of the
London Metal Exchange aluminum price, the company's aluminum
division President said Thursday.
In a presentation on the U.K.-listed miner's Web site, Jon Dudas
outlined BHP Billiton's pricing strategy going forward.
"BHP Billiton is present in the integrated chain but we strive
to price products in their respective markets - for example, price
alumina on demand-supply fundamentals of that industry rather than
linked to LME," he said.
Alumina contracts are usually priced at between 11% and 14% of
the LME aluminum price.
BHP Billiton is the world's fourth-largest producer of bauxite
and fourth biggest aluminum producer, based on third party
sales.
According to its equity share in its operations, BHP Billiton's
bauxite mines have the capacity to produce 17.3 million metric tons
of bauxite, while its alumina refinery capacity is 5.2 million
tons.
The miner has an equity capacity of 1.34 million tons of
aluminum, with smelters in South Africa and stakes in plants in
Argentina and Mozambique.
-By Andrea Hotter, Dow Jones Newswires; +44 (0)20 7842 9413;
andrea.hotter@dowjones.com