LONDON Tata Steel KZN Pte
has closed both ferrochrome furnaces at its plant in Richards
Bay, South Africa, under a power buyback deal with state energy
group Eskom Holdings SOC Ltd., according to market sources.
The furnaces are expected to be
kept offline for two months, AMM sister publication
Metal Bulletin understands.
Tata is the latest South African
ferroalloys producer to agree to stop or reduce production and
sell contracted electricity back to the national grid. Hernic
Ferrochrome Ltd., Ruukki SA and Xstrata Plc are among those
that have struck similar deals since Eskom started a second
round of buyback negotiations in late 2012 amid concerns about
lack of generating capacity.
Macquarie Group Ltd. estimated
that the buyback deals could reduce total ferrochrome output by
300,000 to 500,000 tonnes gross weight, equal to 3 to 4 percent
of annual global output.
Tata Steel KZN produces 150,000
tonnes of ferrochrome annually at Richards Bay from locally
supplied ores, and exports the alloy to the United States, Asia
and Europe, according to its website.
Tata declined to comment.
A version of this article was first
published by AMM sister publication Metal