UPDATE 2-BHP cuts S.Africa aluminium output on power crisis

(Adds BHP, Eskom, union comments, details)

By Sue Thomas and Jackie Cowhig

JOHANNESBURG/LONDON, March 11 (Reuters) - Mining group BHP Billiton (BLT.L: Quote, Profile, Research) said on Tuesday it would almost halve operations at an aluminium smelter in South Africa to curb power demand and help the country recover from an electricity crisis.

BHP, the world's sixth-biggest producer of primary aluminium, said its Bayside smelter would take the brunt of its decision to cut power, while Hillside in South Africa and Mozal in Mozambique would operate on 90 percent of their power needs.

Total annual production loss would be just over 120,000 tonnes across all three smelters, including about 92,000 tonnes from Bayside, BHP said in a statement. Bayside produced 95,000 tonnes of aluminium in the six months to end December.

"You're looking at a little less than half the annual smelting capacity at Bayside," BHP spokeswoman Bronwyn Wilkinson said.

BHP said it had started talks with its employees about a possible closure of operations of its B and C potlines at Bayside. Wilkinson said about 400 employees and 500 contractors could potentially be affected.

The National Union of Mineworkers (NUM) warned on Tuesday it would reject any job losses as a result of BHP's decision.

"If there are any retrenchments we will come out with guns blazing," NUM spokesman Lesiba Seshoka said. "We are totally opposed to any form of retrenchments."