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Number 10/08

On 24 January, the South African national power company, Eskom, determined that it had insufficient power to meet demand. An emergency 10 per cent reduction in power consumption by many large industrial users, including BHP Billiton, was mandated. BHP Billiton’s contracts with Eskom specify that the power supply to our aluminium smelters can only be interrupted approximately one per cent of the time per calendar year. Despite this, and respecting the emergency situation faced by the country, BHP Billiton has reduced its demand by the requested 10 per cent.

Power reductions were initially achieved by reducing power by approximately 10 per cent at all three of our Southern Africa smelters. This operating methodology is unsustainable. As we understand that the power reductions are likely to last for a number of years, we have assessed our options to more effectively deal with a longer-term reduction in power.

As a result of this assessment we plan to take the bulk of the power reduction at Bayside (100 per cent owned by BHP Billiton) while Hillside and Mozal will continue at reduced operating levels to comply with the 10 per cent mandatory overall power demand reduction.

We have therefore commenced consultations with our employees about a possible closure of operations of the B and C potlines at Bayside. Total annual production loss will be just over 120,000 tonnes across all three smelters (100% basis), including approximately 92,000 tonnes from Bayside.

Also in South Africa, our 60 per cent owned manganese business, Samancor, is operating at 90 per cent of normal peak power demand although the impact on production is small and felt principally in the Metalloys alloy plant. Our coal operations have been minimally affected and have offered to help Eskom rebuild its coal stocks.

Notes

BHP Billiton operates three aluminium smelters in southern Africa. Production statistics for these smelters are:
                                                 
Smelter: Bayside
Location: Richards Bay, South Africa
BHP Billiton Ownership: 100 per cent
Annual Production FY07: 194,000 tonnes

Smelter: Hillside
Location: Richards Bay, South Africa
BHP Billiton Ownership: 100 per cent
Annual Production FY07: 704,000 tonnes

Smelter: Mozal
Location: Maputo, Mozambique
BHP Billiton Ownership: 47.1 per cent
Annual Production FY07: 265,000 tonnes (BHP Billiton share)

For further information please contact:

Australia
Samantha Evans, Media Relations
Tel: +61 3 9609 2898  Mobile: +61 400 693 915
email: Samantha.Evans@bhpbilliton.com

Don Carroll, Investor Relations
Tel: +61 3 9609 2686  Mobile: +61 417 591 938
email: Don.A.Carroll@bhpbilliton.com

United Kingdom
Andre Liebenberg, Investor Relations
Tel: +44 20 7802 4131  Mobile: +44 7920 236 974
email: Andre.Liebenberg@bhpbilliton.com

Illtud Harri, Media Relations
Tel: +44 20 7802 4195  Mobile: +44 7920 237 246
email: Illtud.Harri@bhpbilliton.com

United States
Tracey Whitehead, Investor & Media Relations
Tel: US +1 713 599 6100 or UK +44 20 7802 4031
Mobile: +44 7917 648 093
email: Tracey.Whitehead@bhpbilliton.com

South Africa 
Alison Gilbert, Investor Relations
Tel: SA +27 11 376 2121 or UK +44 20 7802 4183
Mobile: +44 7769 936 227
email: Alison.Gilbert@bhpbilliton.com

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