ArcelorMittal South Africa's steel products are continuing to play a significant role in the country's USD 90 billion infrastructure program. With electricity prices having increased an average of 25% per year over the last four years, and acute power shortages across the country, the company's recent agreement with Eskom, the South African national electricity utility, is significant.
Eskom, which generates 95% of electricity in South Africa and 45% of the electricity generated in Africa, identified ArcelorMittal South Africa as a supplier of choice. The power giant recently also negotiated a steel supply agreement with the company to secure steel for the ongoing renovation and construction of power stations. A ten year contract covers flat and long steel products, casting, forging, steel alloys, tubes, cold form sections, mesh products and exotic steel products.
In a further boost to its energy industry credentials, ArcelorMittal South Africa also held discussions with Hitachi Power Africa, a Germany-based energy firm with operations in South Africa, regarding boiler building projects for Medupi and Kusile power stations, which are currently under construction.
Additionally, its Vereeniging site's high quality of service and products have ensured that the site remains a supplier of choice for Sulzer Pumps, who in turn are supplying pumps to Eskom's Kusile and Medupi power stations. The power stations are part of the government R800billion (USD 90.9 billion) infrastructure spend announced some years ago as an economic stimulus and a catalyst for job creation.
The infrastructure spend is expected to continue generating projects that require steel in the next few years.
