BHP Billiton Ltd. (BHP) will cease producing rod and billet from its Bayside aluminum smelter, although production volumes from the South African site won't change, a spokeswoman said Tuesday.

"Bayside has experienced a sharp decline in the domestic demand for its value-add products, placing the operation's financial viability at risk," Brownwyn Wilkinson said in an emailed reply to questions.

She said the smelter, located in the coastal city of Richards Bay, has informed customers it will continue to supply slab, but will cease casting rod and billet from the end of September.

"Bayside management will continue to consult with union representatives and employees who may be affected by this restructure," Wilkinson said.

Aluminum producer Hulamin Ltd. (HLM.JO) earlier Tuesday said BHP Billiton had agreed to continue supplying it with extrusion billet until September and rolling slab until December 2010.

"Hulamin is assessing a number of options to ensure that its future requirements in respect of extrusion billet and rolling slab are satisfied, and that its growth plans are not affected," it said.

The company sources about half of its billet and 30% of its rolling slab from Bayside and produces the balance in its own facilities.

-By Robb M. Stewart, Dow Jones Newswires; +27 11 783 7848; robb.stewart@dowjones.com