https://www.engineeringnews.co.za

Mittal warns of further closures if power prices continue to surge

25th January 2013

By: Terence Creamer

Creamer Media Editor

  

Font size: - +

Steel producer ArcelorMittal South Africa warned last week that some of its facilities had already closed as a result of the steep electricity price rises between 2007 and 2012, while others could reach a “tipping point” should Eskom’s application for five yearly tariff increases of 16% between 2013 and 2018 prevail.

The JSE-listed company is one of Eskom’s top ten customers, consuming about 2.5% of the utility’s yearly sales.

Presenting on the first day of the National Energy Regulator of South Africa’s (Nersa’s) public hearings, the group’s energy specialist, Dennis Britz, directly attributed the recent closure of the group’s electric arc furnaces in Vanderbijlpark to higher electricity costs.

The plants were closed in October last year, shaving 1.2-million tons from the group’s steelmaking capacity and affecting 400 employees, who were redeployed elsewhere within the organisation.

Britz argued that Nersa held South Africa’s economic fortunes in its hands, as the proposal to transition Eskom’s average tariff from 61c/kWh to 128c/kWh would undermine “South Africa’s ability to produce, beneficiate and expand economically”.

He also appealed for subsidies to be removed from the electricity tariff, reporting that Mittal would pay up to R300-million towards levies and subsidies related to its 2012 electricity use.

The company proposed that the National Treasury become responsible for these subsidies, as sustaining them as an “input cost” placed companies at risk of closure.

Britz said that Mittal’s ability to mitigate power price increases through own- and cogeneration and energy efficiency initiatives was constrained technically and also limited by policy uncertainty.

He called for a more market-friendly approach to facilitating the entry of independent power producers.

Edited by Martin Zhuwakinyu
Creamer Media Magazine Managing Editor

Article Enquiry

Email Article

Save Article

Feedback

To advertise email advertising@creamermedia.co.za or click here

Showroom

EKATO Africa
EKATO Africa

Established in 1933, EKATO is the world leader in agitation technology, supplying agitators for processes and applications such as chemicals and...

VISIT SHOWROOM 
MBE Minerals SA (Pty) Ltd
MBE Minerals SA (Pty) Ltd

Your global lifecycle technology & service partner for materials & minerals processing equipment for coal, iron ore, copper, manganese & other...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







301

sq:0.148 0.585s - 122pq - 2rq
Subscribe Now