Former Eskom FD and the current head of Africa’s largest steel group, Paul O’Flaherty, has described the latest round of load shedding as “uncontrolled” and reports that, when interrupted, the JSE-listed company is losing the equivalent of R1.5-million an hour.

Speaking after ArcelorMittal South Africa (AMSA) reported its fifth consecutive yearly loss of R158-million, he said the group’s facilities were being asked to reduce their power consumption “almost daily” and it had become a “serious challenge”.

“We can’t affect the furnaces, but downstream, we have to shut the mills for the times when we are asked to cut back,” he said.

He explained that the R1.5-million-an-hour loss was calculated based on the closure of Vanderbijlpark’s hot-strip mill and its downstream operations, as well as the halting of operations at Newcastle from “the rod mill and down”.

The group was evaluating various self-generation options, beyond its existing capacity, including the building of a new boiler at Vanderbijlpark to supply steam to an underutilised 40 MW power plant and adding about 12 MW of capacity.

Funding options were also being probed for projects to produce power from the recovery of off-gas at both Vanderbijlpark and Newcastle. It was also in discussions with various gas-based independent power producers about generation options for the Saldanha Steel plant, in the Western Cape.

AMSA would continue to interrogate the projects even in the absence of a cogeneration procurement programme from the Department of Energy. In addition, the company was also looking at ways to link with Gauteng Premier David Makhura’s power generation plans for the Vaal Triangle.

But for AMSA, which is pursuing a ‘fill-the-mills strategy’ to raise volumes and reduce costs, the immediate priority is to receive greater certainty from Eskom on its approach to load shedding.

Chief operating officer Dr Hans Ludwig Rosenstock reported that, under the current scenario, it was being given 30-minutes warning to reduce its load by between 10% and 30%, with limited predictability of when the call would be received.

“What’s troubling us is the production loss,” Rosenstock explained, adding that greater forewarning, especially at Vanderbijlpark and Newcastle, was needed to ensure less disruption to output.

In 2014, AMSA purchased 3.52 TWh of electricity, making it one of the country’s top ten consumers. “So it’s a serious issue for us; it’s a serious issued for the country,” O’Flaherty concluded.