Venezuela (Reuters) — Venezuela will chop output at its leading steel mill and two aluminum smelters to reduce energy consumption due to falling water levels at the dam which supplies about 70 percent of the country’s electricity, a government minister said on Tuesday.

In a televised announcement, Basic Industry Minister Rodolfo Sanz said that the country would save about 558 megawatts compelled by restricted power supply at the Guri hydroelectric dam.

The announcements followed the publication in the official gazette, circulated on Tuesday, of resolutions requiring business consumers to draw up plans to cut electricity consumption by at least 20 percent, compared with a year earlier, due to the fall in water levels at hydroelectric dams.

At the country’s leading steelmaker, the government-owned Sidor, Sanz said two furnaces would be closed to save about 200 megawatts of energy, he said.

The company would take advantage of the closure to repair the furnaces in an investment requiring about $200 million, he said.

At the Venalum aluminum smelter, production would fall by about 37 percent to 40 percent, spelling a reduction by around 14,000 tonnes in monthly output, Sanz said.

“We’re going to paralyze about 360 cells (at Venalum) which would be practically the equivalent of two lines of production but we’re going to do it at different lines,” he said.

Venalum has five production lines, he said.
Venalum is 80 percent owned by the government and 20 percent by a consortium of Japanese companies Showa Denko, Marubeni, Kobe Steel, Sumitomo Chemical, Mitsubishi Materials and Mitsubishi Aluminum.

At Alcasa, the government will shut two production lines permanently and focus on increasing production at two other lines via investment, Sanz said.

For the moment, the shutdown of the two production lines at Alcasa would cut production by about 1,600 tonnes a month.

Alcasa produced 10,200 tonnes of aluminum in November, according to the company.

The Alcasa cutbacks would reduce consumption by about 58 megawatts and by about 300 megawatts at Venalum.

Sanz said all foreign aluminum supply contracts would be met and domestic demand for the metal would be satisfied.