Nersa supports ArcelorMittal in electricity discount bid
Backing a plea by the loss-making steelmaker, the National Energy Regulator of South Africa (Nersa) indicated that ArcelorMittal South Africa meets the criteria for discounted electricity tariffs in terms of set rules.
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The regulator, however, said it did not have the authority to dictate an electricity tariff and ArcelorMittal would have to negotiate favourable terms with state-owned power utility Eskom.
ArcelorMittal is winding down its money-losing South African long steel operations, which have been weighed down by high costs, including electricity expenses, while battling weak demand and an influx of imports.
The steelmaker petitioned Nersa to review a decision by Eskom to reject its application for discounted tariffs.
Eskom argued that ArcelorMittal did not meet the criteria for negotiated pricing agreements (NPAs), which are typically offered to energy-intensive industrial power users.
"Nersa considered the eligibility criteria and other factors outlined in the NPA framework and concluded that ArcelorMittal South Africa substantially complied with the prescribed criteria," the regulator said in a statement.
ArcelorMittal said this week it was winding down its long steel plants at Newcastle and Vereeniging as planned on 30 September, after failing to secure government concessions on utility charges and import duties, among other demands.
The closure of the plants could result in the loss of more than 3,500 direct jobs, the company said.
ArcelorMittal said the state-owned Industrial Development Corporation, an 8% shareholder in ArcelorMittal South Africa, was conducting due diligence on the steelmaker.