| Wed 8 Jun 2005, 10:01 | | New plant will save Mittal R100m a year |
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New plant will save Mittal R100m a year
June 8, 2005
By Ingrid Salgado
Cape Town - Mittal Steel South Africa`s new R204 million pulverised coal injection plant in Newcastle would save the steel maker about R100 million a year in imports, Rick Reato, the general manager of Mittal Steel Newcastle and Vereeniging, said yesterday.
The timing of the plant`s commissioning had been fortunate, he said, referring to the 120 percent increase since last year in the global costs of coking coal.
Mittal had now been able to eliminate all imports of coke, while its imported metallurgical coal requirements had been reduced, said Reato. As a result, the plant would cut costs of hot metal by about R60 a ton
This is the biggest capital spending we`ve had for some time
.
The group is majority owned by the world`s biggest steel maker, Mittal Steel, which is ranked among the lowest-cost producers of steel due to its access to cheap raw materials. In South Africa, the company has a preferential agreement to source iron ore from sister company Kumba at cost plus 3 percent.
Outlining the background to the coal input process at Newcastle, Reato said the steel works had lost its sources of high-quality coal from two small mines in the area. It had then attempted to minimise the costs of importing coke and coking coal by injecting tar, pitch and later natural gas into its blast furnace. Those inputs had now been replaced with pulverised coal.
`The plant is designed to be able to inject 160kg of coal for every ton of metal produced. Obviously we now have to ramp up to that,` said Reato, indicating that the target would be met by the end of the year.
Reato said the R450 million recommissioning of a mothballed coke oven battery at Newcastle was due to be completed next September. This would produce market coke, a lower grade than metallurgical coke, for sale to the ferrochrome industry.
Capital expenditure on the coke oven battery, pulverised coal injection plant and several smaller environmental projects at Newcastle amounted to R750 million, `the biggest capital spending we`ve had for some time`, he said.
Newcastle accounts for 1.7 million tons, or 25 percent, of Mittal Steel SA`s annual output, second only to Mittal`s Vanderbijlpark facilities, which contribute about 3.5 million tons a year. Newcastle Steel is the country`s leading supplier of long products.
Mittal Steel SA closed 3.54 percent lower at R48.45 on the JSE Securities Exchange yesterday. The FTSE/JSE Africa Top40 index declined 0.95 percent.
