ArcelorMittal South Africa - the world's largest steel and mining company - plans to purchase power from an 800 megawatt compressed natural gas-fired power plant to reduce electricity costs. The plant will be built near the company's existing steel-making facility in the Western Cape.
The Saldanha facility spends 44 percent of its operating costs on electricity currently, and uses 160 MW of power each year, totaling $74 million, Reuters reported. If the compressed natural gas plant project is approved, ArcelorMittal would import gas from Angola and other countries, the source said.
Power provider Eskom was recently granted approval by South African energy regulators to raise prices by 8 percent over five years. Eskom also recently declared a supply emergency due to some units being shut down for maintenance and other older units experiencing problems. ArcelorMittal made an agreement with Eskom to reduce its energy usage by 10 percent recently.