(The Philippine Star) | Updated September 2, 2013 - 12:00am
MANILA, Philippines - A subsidiary of listed TKC Steel Corp., the only publicly listed steel company in the country, has stopped its operations in Lanao del Norte due to power woes.
Power outages have damaged the equipment of steel producer Treasure Steelworks Corp. (Treasure Steel), the company said in a regulatory filing.
“Treasure Steel temporarily suspended its electric arc furnace operation in the production of steel billets as a result of the incessant shortage of power supply in Mindanao,” TKC said.
Treasure Steel’s plant in Iligan City have been receiving only 30 percent of its power requirements in the past three years, preventing it from manufacturing steel billets which are raw materials of downstream steel products like bars, wire rods and sections.
Power interruptions from January to July damaged P120 million worth of equipment and endanger employees, TKC said.
The Mindanao grid relies heavily on hydropower for more than half of its baseload capacity. Power output, therefore, declines substantially during the summer when dams dry up.
“As soon as sufficient power supply becomes available in the Mindanao grid, Treasure Steel will resume the operation of its electric arc furnace facilities for steel billet production,” TKC said.
In the meantime, TKC said it will continue operating its blast furnace facilities to produce either nickel pig iron or metal pig iron, whichever is more cost efficient, because of high demand.
“Production of the said products will commence as soon as an ore dryer is installed to the blast furnace facilities,” TKC said.
The ore dryer, which will ensure continuous operations amid constant rainshowers in Mindanao, will arrive in Iligan City in the next few days, the company added. source
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