ArcelorMittal S.Africa plans 800MW gas plant - CNBC Africa

ArcelorMittal S.Africa plans 800MW gas plant

Southern Africa

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Electricity makes up 44 percent of ArcelorMittal's Saldanha plant costs. PHOTO: Getty Images

The plant will be built at a steel-making facility in the Western Cape, the Business Report newspaper reported.

Intensive power users say expensive tariffs in Africa's biggest economy make them uncompetitive. Earlier this year, the energy regulator gave the nod to power utility Eskom to raise prices by 8 per cent annually over five years.

Electricity makes up 44 percent of ArcelorMittal's Saldanha plant costs. The facility uses 160 MW of electricity at a cost of 750 million rand each year.

If the project receives all necessary approvals, ArcelorMittal will import gas from countries such as Angola, the local daily reported.

Eskom declared a supply emergency this week after some of its creaking generating units tripped unexpectedly while others were shut for maintenance. It lifted the warning on Thursday but said supply remained tight.

Eskom last declared an emergency in 2008 when it was forced to introduce rolling blackouts, costing the economy billions of dollars in lost output.

ArcelorMittal complied with Eskom's request for top electricity consumers to reduce usage by 10 per cent earlier this week, which had cost it 200 tonnes of production, the paper said.

The unit of the world's top steelmaker reported a 35 percent rise in third-quarter profit earlier in November following higher sales.

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