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ArcelorMittal looks for power producer to build new plant

Electricity accounts for nearly a third of costs at Saldanha. (Image source: Daniel J Heinlin/Shutterstock)

ArcelorMittal South Africa is looking for an independent power producer (IPP) to build an 800MW gas-fired power station at its Saldanha Steel Works

Chief executive Paul O’Flaherty said that ArcelorMittal, which is reviewing its Saldanha operation partly due to high electricity costs, is willing to take as much as 220MW of the plant’s capacity and the company is in talks with other industrial users and the government to sign long-term contracts for the rest.

Building an IPP is vital for the survival of Saldanha, O’Flaherty told Reuters, adding that state-owned utility Eskom’s rising electricity prices were unaffordable.

Electricity accounts for nearly a third of costs at Saldanha, the company’s newest and only export-focused plant, compared with less than 10 per cent for the rest of the company.

“An environmental impact study is underway on our land,” O’Flaherty said adding that ArcelorMittal South Africa would not own the project.

The steel plant produces high quality ultra-thin hot rolled coil (UTHRC). The ISO 9002 and ISO 14001 accredited plant is the only steel mill in the world to have successfully combined the Corex/Midrex process into a continuous chain — replacing the need for coke ovens and blast furnaces.

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