By Agnieszka Flak and Harpreet Bhal
JOHANNESBURG/LONDON (Reuters) - Tata Steel KZN, a subsidiary of the Indian steel maker
Officials at Tata Steel KZN and Eskom
Under deals with Eskom, companies agree to temporarily suspend production, allowing the utility to buy back the energy that would have been used by the furnaces and feed it back to its starved electricity grid.
The deals are normally net positive for the companies, which use stocks to supply customers.
The Tata-Eskom deal follows shutdowns by other ferrochrome producers in the country, including a joint venture between Merafe Resources
Tata Steel KZN's plant, located at Richards Bay on South Africa's eastern Indian Ocean coast, produces 150,000 tonnes of ferrochrome, a steelmaking ingredient, which is exported to customers in Asia, Europe and the United States.
South Africa has been struggling to meet demand for power, especially as new power plants meant to plug the shortfall have been delayed.
Supply will remain vulnerable until the first units of Eskom's new stations become operational later this year.
The national grid nearly collapsed four years ago, forcing mines and smelters to shut for days and costing Africa's top economy billions of dollars in lost output.
(Reporting by Agnieszka Flak in Johannesburg and Harpreet Bhal in London; editing by James Jukwey)