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Steelmaker seeks IPP to build South Africa gas power plant

Global steelmaker ArcelorMittal is reportedly seeking an independent power producer (IPP) to build an 800 MW gas-fired power plant at its Saldanha steelworks (pictured) in South Africa.

According to statements by the firm’s CEO Paul O’Flaherty, the move is necessary to save the troubled facility, which could be closed due to a confluence of low steel prices and rising power tariffs imposed by state utility Eskom.

Earlier this month, the company said it had written down ZAR3.6bn ($228m) on the Saldanha works, and that “the future of the operation is currently being reviewed”.

The facility would use up to 220 MW of the new power plant’s capacity, with the remainder used by other industrial consumers. ArcelorMittal is reportedly in talks with such users with the aim of establishing long-term contracts for the power.

Saldanha is ArcelorMittal’s newest steelworks and the only one focused on producing for export. Power represents almost a third of its costs.

O’Flaherty said an environmental impact study is underway to prepare for the power plant.