Forum Archive Index - December 2002

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

Hi Hans,
>
> 
>Likewise NZ Steel at Glenbrook. If it was marginal with 
>cheap energy, what will it be like with higher costs 
>amid a worldwide glut of steel production capability?
> 
> 

To partly answer your question:

"Ironsands and coal are the main raw materials used in the 
steelmaking process, both of which are sourced locally.  Coal is 
transported by rail approximately 50km from a mine owned by the New 
Zealand Government.  New Zealand Steel's single largest non labour 
cost is electricity, approximately 60% of which is generated 
onsite through a cogeneration plant plant owned by Duke energy."

source p46 Scheme Booklet, 'Scheme of arrangement and reduction of 
capitalin relation to the demerger of BHP Steel Limited', as 
published by BHP Billiton, May 2002.

In other words coal generates 60% of the NZ Steel plants electricity 
as a by product of the heating process used in production.  So it 
will be significantly insulated from external electricity price 
rises.

SNOOPY


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