Bloomberg reported that BHP Billiton Limited's Samancor Manganese unit has stopped producing silica manganese at its Metalloys plant in Meyerton in South Africa to reduce electricity consumption and switch output to more profitable ferromanganese.

BHP said that a USD 100 million ferromanganese furnace, due for completion by the end of 2012, will replace lost output of 120,000 tonnes of silica manganese a year.

South Africa has called on mining companies such as BHP, Anglo American Plc and Xstrata Plc to curb power consumption as the state utility grapples with a mounting backlog of plant maintenance.

BHP will make use of the Meyerton shutdown to convert the facility to more lucrative ferromanganese, an alloy of iron and manganese used for making hard steel.

Mr Tom Schutte CEO of Samancor said that "Difficult market conditions are affecting the whole manganese industry. Focusing on ferromanganese will make Metalloys more economically and environmentally sustainable."

Samancor Manganese is the world's largest integrated producer of manganese and is 60% owned and operated by BHP. Metalloys produces 510,000 tonnes of manganese alloys a year.

(Sourced from www.bloomberg.net)