Steel companies investing in power plant

Monday, March 4, 2002

Brazil's Maranhao-based steel companies Simasa and Pindare are investing 9.6mn reais (US$4mn) in an 8MW power plant, regional newspapers reported.

The two are aiming to avoid the problems of future energy crises such as the one seen last year and early 2002, and reduce costs in order to become more competitive on the world market.

According to an area trade union, steel plants that are self-sufficient in electricity can cut their costs by 4-5%.

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The power plant, slated for completion by the end of August, is being built as fast as possible because natural gas for the steelmakers' current generator is running out. Part of the financing is coming from federal development bank BNDES. Both steel plants are owned by construction company Queiroz Galvao.

Simasa and Pindare produce close to 1,200t/d of pig iron. All the output is exported to the United States. The outlook for this year is to produce 400,000t, the same as 2001.

Despite a depressed market for pig iron, the steel hub in northeast Brazil's Acailandia (where Simasa and Pindare as well as other mills are located) expects to export 1.1Mt of the product this year.