Mittal may cut gas use at Ukraine steel mill

Jan 4 | Updated: Jan 5 2006, 06:03am hrs
Mittal Steel Co, the worlds largest steelmaker, said it may cut gas use at its Kryvorizhstal mill in Ukraine after an accord by the country with OAO Gazprom means the cost for the fuel it gets from Russia will almost double.

The company may use coke from its plants in Poland and the Czech Republic to fire its furnaces, reducing the amount of natural gas it uses in the Ukraine, Paul Weigh, a Mittal spokesperson in London, said on Wednesday in a telephone interview. Mittal may be able to reduce its natural gas consumption to 50 million cubic meters of gas a month, half of what it uses now.

The rise in gas prices from Gazprom will have minimal impact on production costs, Mr Weigh said.

Mittal will not cut steel production at Kryvorizhstal, which is based in the southern part of the country, he added. Ukraine will pay Russia $95 per 1,000 cubic meters for the fuel for five years, up from $50 under a previous arrangement, OAO Gazprom, Russias state-owned natural-gas monopoly, said at a press conference in Moscow on Wednesday.