ArcelorMittal South Africa is planning to build an 800mW compressed natural gas plant at its Western Cape steel plant in a bid to reduce its electricity costs.

With electricity making up 44% of the steel giant’s plant costs and the country’s energy regulator giving power provider Eskom the green light on raising its prices by 8%, ArcelorMittal’s power plant plan is viewed as a good move.

ArcelorMittal spends around $74 million per annum on power and recently complied with a request from Eskom to reduce consumption by 10%.

Eskom has been experiencing supply problems linked with generator maintenance and unexpected shutdowns and says that supply remains tight.