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Exxaro cites rising electricity costs as it shuts down SA's only zinc refinery

Soaring electricity costs and poor service from Transnet have been singled out as the main reasons for the closure of SA's only zinc refinery.


This will force the country's largest steel maker, Arcelor-Mittal, and others in the galvanised steel business to source the product from overseas.


Exxaro Resources' head of mineral sands and base metals, Trevor Arran, laid part of the blame for the decision to close the 100 000-ton-a-year capacity Zincor refinery in Springs, near Johannesburg, and cut 640 permanent and 108 contractors jobs, at the door of Eskom and Transnet. High Costs and indifferent service were the key factors in Exxaro's decision, he said.


However, Eskom defended the price of electricity. Spokeswoman Hilary Joffe said the latest survey by international energy consultants NUS Consulting showed that SA's electricity tariffs remained competitive globally despite recent increases. "It is unfortunate that Exxaro blames electricity prices for Zincor's woes. Exxaro is one of the largest suppliers of coal to Eskom ... the most significant driver of electricity costs," said Ms Joffe.


There are no other zinc refineries in SA and domestic users of zinc, which is used to galvanise steel to make it resistant to corrosion, will have to import it. It is also used to make brass, an alloy with copper. 


Exxaro has been making it clear it wants to exit the volatile zinc business and has been looking for buyers. It is speaking to other groups to buy its stakes in various mines, but there has been little interest in the refinery.


Source: Business Day

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