Steel producer ArcelorMittal Galati, the second biggest electricity consumer in Romania, reached a deal with Romanian power producer Nuclearelectrica to buy electricity worth EUR 76.9 million over the next year and a half. The transaction was closed through the Romanian energy market OPCOM, where ArcelorMittal placed four other bids in the last year without being able to find a seller.

The company needed this contract to secure a constant supply, after the contract it had with Hidroelectrica expired in late 2011 and was not renewed due to Hidroelectrica's insolvency.

ArcelorMittal will pay Nuclearelectrica 181 RON (or some EUR 40) per MWh for a total quantity of 1.863 million MWh. In the previous contract with Hidroelectrica, the company paid an average price of 130 RON per MWh.

ArcelorMittal's representatives say that although they are happy that Nuclearelectrica answered their bid, they are worried by the rising cost of energy.

“We are extremely worried with the explosive rise in energy costs due to subsidies paid for the green energy production and the gas price liberalization. Steel making is an intensely power consuming process and companies in this sector, such as ArcelorMittal Galati need fair and predictable prices to be able to compete on export markets and to keep their activities in Romania”, said ArcelorMittal in a press statement.

ArcelorMittal had a turnover of RON 4.66 billion (EUR 1.1 billion) in 2011 and a RON 620 million (EUR 146 million) loss. The company had more than 8,700 employees. State owned Nuclearelectrica had revenues of RON 1.58 billion (EUR 373 million) in 2011.

editor@romania-insider.com