http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 12.87Change: -0.14
R/$ = 11.46Change: -0.02
Au 1278.28 $/ozChange: -0.53
Pt 1254.50 $/ozChange: 6.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Jul 30, 2008

Work likely to start in 2009 on brownfield Newcastle expansion

Back
Construction|Engineering|Natal|Newcastle|Africa|ArcelorMittal South Africa|Cogeneration|Components|Eskom|PROJECT|Projects|Africa|South Africa|Cogeneration|Energy|Flat Steel|Long-steel Production Capacity|Product|Steel|Steel Arising|Steel Group|The Group|Environmental|Cogeneration|Infrastructure|Luc Bonte|Nonkululeko Nyembezi-Heita|Power|Operations|Sub-Saharan Africa
Construction|Engineering||Africa|Cogeneration|Components|Eskom|PROJECT|Projects|Africa||Cogeneration|Energy|Steel||Environmental|Cogeneration|Infrastructure|Power|Operations|
construction|engineering|natal|newcastle|africa-company|arcelormittal-south-africa|cogeneration|components|eskom|project|projects|africa|south-africa|cogeneration-industry-term|energy|flat-steel|longsteel-production-capacity|product|steel|steel-arising|steel-group|the-group|environmental|cogeneration-person|infrastructure|luc-bonte|nonkululeko-nyembeziheita|power|operations|subsaharan-africa
© Reuse this Steel group ArcelorMittal South Africa was close to finalising the configuration and capital costs associated with the expansion of its long-steel production capacity at Newcastle, in KwaZulu-Natal. But it appeared likely that the project would no longer proceed on the basis of the creation of a 'mega' greenfield blast furnace as first mooted, and would instead be pursued as an incremental brownfield expansion involving two smaller furnaces.



CEO Nonkululeko Nyembezi-Heita said on Wednesday that it was still targeting 2011 for the commissioning of the projects, and told Engineering News Online that this would require construction work to begin on site during the course of 2009.

The group would be placing enquiries in the market soon for the main project components and the environmental impact assessment was already under way.

However, Nyembezi-Heita would not be drawn on the final capital estimate, stressing that this could only be determined once the technical configuration had been selected. It was also only then that the group's board, which had approved the principle of expanding long-product output at Newcastle, would be in a position to offer its final sanction.

The JSE-listed company was expecting to spend R5-billion between 2008 and 2011 on increasing capacity across its operations to a targeted level of ten-million tons a year, from a current nameplate of about 8-million tons a year.

It was anticipated that the bulk of this money would be directed toward the Newcastle expansion, which would include the development of a sixth blast furnace, as well as a new section mill and billet caster.

INFRASTRUCTURE UNDERPIN
The group's stated objective was to raising long-product volumes in line with anticipated demand growth for such steel arising on the back of what is expected to be a material and sustained infrastructure push across sub-Saharan Africa (SSA).

Indeed, Nyembezi-Heita noted that the company expected SSA demand to rise from 12,7-million tons a year currently to 18,2-million tons a year by 2014 and said that ArcelorMittal South Africa would also seek to raise it share of that enlarged market from 42% to 46% by 2014.

Given that infrastructure projects were long-product intensive the company would continue to pursue its stated strategy of expanding long output, while adding value to its flat steel. In fact, it was expecting to spend about R3,6-billion between 2008 and 2011 on what it described as downstream value-adding projects.

COGEN PUSH
But while the final Newcastle expansion plan was still to emerge, it was increasingly certain that the expansion would be coupled with a 130-MW cogeneration plant.

Nyembezi-Heita said that it had a technical team working on the power plan, which would not only make it more energy self-sufficient, but could also support its carbon dioxide emission-reduction plans.

She revealed that it was engaging with State power utility Eskom under its Medium Term Power Purchase Programme (MTPPP), which offers a potentially lucrative initial price of 65c/kWh for any project able to reach commercial operation by 2012. In fact, the utility was hopeful of facilitating the introduction of about 3 000 MW of cogeneration power plants between now and 2012.

However, Nyembezi-Heita noted that the engagement was still at an early stage and that there were many details still to clarify.

She also stressed that there would probably be a lag between the start-up of the new Newcastle blast furnace and the commissioning of the power plant, which meant that it was having to consider a range of options to fill the gap that would exist both during construction and start-up.

The group, as one of South Africa's 138 largest electricity consumers was still subject to a 90% ration from Eskom, which was likely to be made mandatory once the power conservation programme was introduced later this year.

Already, it had sacrificed 120 000 t in the first half of 2008 as a result of the rationing. This was likely to increase to 180 000 t in the second half of the year, owing mainly to the fact that its power demands would increase as it completed it various reline projects.

Company president Luc Bonte, thus, confirmed that the full year losses as a result of electricity shortages would be in line with its earlier guidance of 300 000 t.

The Newcastle co-generation project did not as yet form part of the company's R13,1-billion rolling capex plans for 2008 through to 2011.

Edited by: Terence Creamer
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Metals News
A Competition Tribunal hearing into alleged cartel activity and price-fixing by several companies in the wire and wire products manufacturing industry was again postponed on Monday pending a decision by the Competition Appeal Court (CAC). Respondents Allens Meshco,...
Global crude steel production rose 1.2% year-on-year to 1.66-billion tonnes in 2014, the World Steel Association (worldsteel) revealed on Thursday. While crude steel production in the European Union (EU), North America and Asia expanded by a modest 1.7%, 2% and 1.4%...
Black-economic empowered diversified industrial holdings company, the Southern Palace Group (SPG), reported on Monday that it had entered into an arrangement to buy 100% of Macsteel Service Centres South Africa (MSCSA). MSCSA is a leading supplier of value-added...
More
 
 
Latest News
Temporary power generation services provider Aggreko has extended the contract for its 200 MW gas-fired power project in Côte d'Ivoire by three years, with the option to extend this by a further two years.
GE chairperson and CEO Jeffrey Immelt
Troubled South African State power utility Eskom should place emphasis on stability ahead of improvement, GE chairperson and CEO Jeffrey Immelt suggested on Monday. Speaking at the Gordon Institute of Business Science (GIBS) in Johannesburg, the head of the...
A Competition Tribunal hearing into alleged cartel activity and price-fixing by several companies in the wire and wire products manufacturing industry was again postponed on Monday pending a decision by the Competition Appeal Court (CAC). Respondents Allens Meshco,...
More
 
 
Recent Research Reports
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
 
 
 
 
 
This Week's Magazine
BRUCE BRADFORD The 3D printers have a clear upgrade path to eventually print in wood, ceramics and metal-alloys
Three-dimensional (3D) printers being sold in South Africa by electronics distributor Rectron currently print in two types of plastic, but have a clear upgrade path over the next five years to eventually print in wood, ceramics and metal-alloy materials, says Rectron...
The world’s two dominant commercial aircraft manufacturers, Airbus of Europe and Boeing of the US, both recently announced that they had made record aircraft deliveries in 2014. Boeing set a global record for the industry with 723 commercial aircraft delivered, while...
The Western Cape is shifting further into the renewable-energy space with the official opening of a factory specialising in solar inverters, a key component of solar photovoltaic (PV) plants. The investment in the manufacturing facility in Cape Town aims to boost the...
Business Leadership South Africa (BLSA) last month welcomed Cabinet’s establishment of a technical team war room to undertake various interventions to improve electricity supply security over the short- and medium-term, but added that the private sector also had a...
Despite a rapid rise in mobile connections and the economic and social benefits of such connectivity, more than half of the world ended 2014 unconnected. For this reason, industry commentators believe the biggest impact of mobile technology is still to come –...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks