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Friday, March 26, 2010.

From Creamer Media in Johannesburg, I'm Sheila Barradas.

Making headlines today:

South Africa's second-largest steel producer Highveld Steel & Vanadium is considering a range of internal cogeneration and power-generation plans in a bid to help cushion it from average Eskom tariff increases of around 25% a year between April 1, 2010, and March 31, 2013.

Newly appointed CEO Scott MacDonald, describes the increases, which were approved by Nersa earlier this year, as "enormous". He told Engineering News Online that the increases would have a "huge impact" on the company's cost base.

In the year to end December 2009, Highveld's energy costs rose 9% to 530-million-rand, despite the fact that it curtailed output as South Africa descended into its first recession in 17 years.

Higher electricity prices have also been identified as a key risk factor for 2010, during which the steel and vanadium producer hopes to show a recovery when compared with 2009.

The City of Johannesburg has released for public comment its proposed water, electricity and waste removal tariffs for the 2010/11 financial period, which will begin on July 1.

The city indicated that power tariffs would increase owing mainly to increases in City Power's bulk purchase costs from Eskom and the Kelvin power station.

Overall, the proposed increases appeared to be higher than the municipal guideline increase of 15,33% approved for implementation by Nersa when it announced the Eskom increases on February 24, 2010.

Councillor Parks Tau said that the step tariff introduced in 2008 would continue to apply and that the city's tariff structure would also continue to seek to incentivise demand reduction initiatives.

Also making headlines:

The World Steel Association says demand for steel around the world will rise 11% in 2010 as the global economy recovers.
The South African Reserve Bank unexpectedly cuts its repo rate by 50 basis points to 6,5%.
Toyota's recall programme is more than one-third complete.
And, Heineken and Diageo conclude talks to build a 500-million-rand barley-malting facility at its brewery in South Africa.

That's a round up of news making headlines today.