Steel producer ArcelorMittal South Africa has initiated feasibility studies for two 100 MW renewable energy projects to supply electricity to its existing facilities in Gauteng and the Western Cape.
The studies should be finalised during 2023/2024, the company said in a statement.
CEO Kobus Verster indicated that the decision was motivated both by the group’s objective of lower the carbon intensity of production and to reduce its reliance on Eskom, which continues to resort to regular load-shedding and whose tariffs have risen sharply over the past decade and a bit.
The study had also been facilitated, however, by regulatory changes in South Africa, allowing sub-100 MW projects to proceed without a licence, including projects that sell and wheel electricity through the grid.
ArcelorMittal South Africa is the latest large electricity consumer to announce plans to invest in renewable electricity since the reform, with Minerals Council South Africa indicating that its members have a pipeline of projects with a collective capacity of nearly 4 000 MW.
It also comes as the JSE-listed company considers technical options, including a scrap-based option, for the possible reopening of the Saldanha Steel mill in the Western Cape, which was mothballed in 2019.
“The alternative energy source will also offer more energy security by enabling the ArcelorMittal South Africa plants to be less dependent on costly electricity supply from the national grid which has significantly impacted business performance in recent years.”
The company said it would advance to the next stage with several pre-qualified experts to start and complete the development.
“Based on current information, the company expects to benefit from the projects by early 2025, although this could change as the feasibility study reveals more.”