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S. African producers begin ferrochrome furnace restarts

Keywords: Tags  South Africa producers, Eskom, BHP Billiton, Xstrata Glencore, aluminum, ferrochrome, Janie Davies

LONDON — South African ferrochrome producers are switching furnaces back on as state energy group Eskom Holdings SOC Ltd. continues to seek ways to conserve power after the expiration of recent power buyback deals.

All of South Africa’s ferrochrome producers cut production in the first half of this year and sold the conserved electricity back to Eskom, but the deals expired June 1, coinciding with South Africa’s more expensive winter tariff period.

Eskom remains concerned about a lack of generating capacity and is approaching individual industrial users asking them to curb electricity consumption, particularly during peak hours.

It is also asking "all South Africans" to try to switch off unnecessary power, warning that the risk of outages is high, according to a notice on its website.

Eskom’s efforts suggest further agreements in which users are financially compensated for reducing power will be reached, despite National Energy Regulator of South Africa (Nersa) saying in April is was "disallowing" more buybacks, well-placed sources told AMM sister publication Metal Bulletin.

BHP Billiton lost power at two aluminum smelters last Thursday, according to South African media reports.

A long-standing agreement allows Eskom to cut power to the mining group when the country’s energy network is under pressure.

"I can confirm that our contracts with Eskom have always included a clause that allows them to interrupt supply to our aluminium smelters when demand exceeds their generating capacity," a spokeswoman for BHP Billiton said.

Since June 1, about 10 ferrochrome smelters have been switched back on or are due to be switched back on this quarter.

A version of this article was first published in AMM sister publication Metal Bulletin.

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