Saldanha Bay. Duferco & Mittal will be effected by the closure of Zincor

August 2, 2011 by: admin

Refinery closure ‘a loss to beneficiation’

Decision to permanently close zinc production of about 105000 tons a year at Zincor refinery because of the cost of electricity and labour

EXXARO Resources says that its in-principle decision to permanently close zinc production of about 105000 tons a year at its Zincor refinery in Gauteng is a loss to beneficiation.

Trevor Arran, Exxaro executive general manager of sands and base metals, said yesterday he believed that the zinc concentrate would be relatively easily sold elsewhere.

“But it’s a backward step in beneficiation…. Zinc units needed in the galvanising industry would have to be imported … (and) the costs attached to this would have to be absorbed or passed on to the consumer.” Mr Arran said the cost of electricity was one of the reasons for closing Zincor, and also that it was an old plant with intensive labour costs.

Yesterday, Public Enterprises Minister Malusi Gigaba said Exxaro might be “shifting the blame” in claiming that high electricity costs and Transnet’s poor rail service led to the closure of the refinery. Yesterday, Transnet Freight Rail denied the allegations, claiming Exxaro had been trying to sell the plant and had stopped investing in it.

SA’s primary steel producer, ArcelorMittal SA , and Saldanha-based Duferco Steel Processing, take up nearly 50% of Zincor’s output. ArcelorMittal SA yesterday declined to comment. “Anyone buying zinc from Zincor will be hugely affected. (We) use about 1000-2000 tons a month,” Duferco marketing manager Nico van Wyk said yesterday.

“We’ve got (thousands of) tons of structural steel that has to be galvanised for the Medupi (power) project over three years … also Kusile”, Robor Galvanisers MD Nico Schoeman , said yesterday.

But some see the shutting of Zincor as an opportunity. “(The) upside is we would have more than one supplier,” Bob Wilmot, executive director of the Hot Dip Galvanisers Association of Southern Africa, said yesterday.

Source businessday.co.za

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