The Libyan government has ordered a full production halt at the country's largest metallurgical enterprise, LISCO. The decision was made due to the critical state of the energy system and the need to redirect the plant's capacity to the national grid. This was reported by Minprom citing Metal Expert, according to the portal PromPolitInform.
Prime Minister Abdel Hamid Dbeibah issued the corresponding order. The enterprise, located in the city of Misrata, was forced to cease steel smelting to provide electricity to cover the national deficit, which is accompanied by power outages lasting up to ten hours a day.
Causes of the systemic energy collapse
Libya’s energy sector relies on natural gas for 75% of its generation, but critical underinvestment in extraction has led to massive problems. Furthermore, the country spends about 1 billion dollars monthly on fuel imports, which is an inefficient way to overcome the deficit. According to preliminary estimates, bringing new gas fields into operation will take at least 7-8 years.
Consequences of the shutdown for the industry
The LISCO shutdown negatively impacts the Mediterranean market, as the plant is a major supplier of raw materials and finished products. The plant’s annual capacities include 1.7 million tons of steel, 1.1 million tons of direct reduced iron (DRI), and 650,000 tons of hot briquetted iron (HBI).
Additionally, the plant provided production of 1.2 million tons of rebar, 580,000 tons of hot-rolled coils, 200,000 tons of wire rod, 154,000 tons of cold-rolled coils, and 120,000 tons of section steel. The loss of these volumes will lead to a reconfiguration of supply chains in the region.
Illustrative photo: Marek Ślusarczyk (Tupungato) Photo gallery / CC BY 3.0
