ArcelorMittal South Africa Ltd. has initiated talks with the government to build an 800 megawatt gas power station on its major export-focused Saldanha Steel property in the Western Cape province, reports Reuters, citing the company’s chief executive, Paul O’Flaherty.
The company reported a headline loss of 1,338 cents per share for the year ended Dec. 31, a 2247 percent increase over the previous year’s 57 cents is currently reviewing operations at its Saldanha plant, due in part to high electricity costs, among other challenges.
A statement by the company said that the local steel industry was under severe threat due to the economic meltdown and poor international steel export price caused by “the glut of oversupply driven by China”.
ArcelorMittal, like other steelmaker, is struggling to compete with an increase in subsidized Chinese supplies which could go as low as 25 percent below local production costs. The company has asked for trade protection, noting that no significant change could come in the industry with this.
According to O’Flaherty, who will step down as chief executive tomorrow, ArcelorMittal plans to use 180 MW to 220 MW of the gas power plant’s energy and sell the remainder to other industrial users. Chief Financial Officer Dean Subramanian will act as the new CEO from Feb. 13, while Gerhard van Zyl will act as CFO.