- South Africa’s Energy Regulator, NERSA, has approved that, on a balance of scales, ArcelorMittal South Africa’s (AMSA) applications to Eskom for six-year Negotiated Pricing Agreements (NPAs) for its Newcastle and Vanderbijlpark steel manufacturing plants do meet the eligibility criteria prescribed in the Interim Long-term Negotiated Pricing Agreement Framework (NPA Framework).
ArcelorMittal is in the process of selling its South African operation to the state-owned Industrial Development Corporation after recently announcing the closure of its Newcastle and Vereeniging long steel plants. But talks have stalled over valuation differences, Bloomberg News reported on Thursday, citing people familiar with the matter. The company wants considerably more than what was offered.
In September and October 2024, AMSA submitted the NPA applications to Eskom to consider negotiating reduced tariffs in terms of the provisions of the NPA Framework. Eskom rejected both applications, stating that AMSA failed to comply with the requirements and/or the criteria stipulated in the NPA Framework. In terms of clause 12.10 of the NPA Framework, Eskom had to submit its recommendation to NERSA for approval. The NPA Framework also enables AMSA to petition NERSA regarding Eskom’s decision. In this regard, AMSA invoked section 6.1 of the NPA Framework by petitioning NERSA to review Eskom’s decision in line with sections 12.12 and 12.13 of the NPA Framework.
NERSA conducted a comprehensive assessment of AMSA’s information submitted to Eskom to determine whether the provisions of the NPA Framework were applied appropriately and fairly. NERSA considered the eligibility criteria and other factors outlined in the NPA Framework and concluded that AMSA substantially complied with the prescribed criteria.
It is important to emphasise that NERSA does not intend to interfere with the contractual agreements or price negotiations between Eskom and AMSA. Contrary to the article Moneyweb published on 1 September 2025, the Energy Regulator did not approve any AMSA application for a reduced tariff. It is only licensees that can request the Energy Regulator to deviate from an approved tariff under section 15(2) of the Electricity Regulation Act of 2006, and such requests are evaluated within the NPA Framework.
”It will be AMSA’s decision to approach Eskom, following the Energy Regulator’s decision, to apply for and negotiate a favourable tariff. NERSA’s role is to implement and enforce the NPA Framework provisions. This means that NERSA does not intervene in price or tariff negotiations on behalf of customers,” said Ms Nomfundo Maseti, Full-Time Regulator Member Responsible for Electricity Regulation.
Author: Bryan Groenendaal
