July, 04 2005
Munda ready for Delhi face-off
A day before the chief minister is slated to leave for London, he is preparing to face his critics in the party.
BJP president Lal Krishna Advani, Arjusn Munda claimed here today, had convened an emergency meeting on Jharkhand, which was likely to take place in New Delhi on Friday, July 8.
Munda had been stung by criticism that his government is both corrupt and non-functional. Former external affairs minister Yashwant Sinha had lent his weight to Munda-baiter Babulal Marandi and had publicly hauled up the state government for its failures. The state government, Sinha had said on three successive days last month, had failed to provide even basic amenities like power and water to the people.
Munda today exuded confidence and declared that he was prepared to take part in any debate within the party on the development of the state. All the issues raised by the critics, he hoped, would be discussed in the New Delhi meeting. The meeting, he said, will be attended by Yashwant Sinha, Babulal Marandi, partys Jharkhand in-charge Rajnath Singh, party general secretary Arun Jaitley and BJP leader and Jamshedpur (West) MLA and a Munda confidante, Saryu Rai.
The chief minister, who had earlier refused to comment on the public criticism, today advised senior leaders to exercise restraint while speaking in public or to the media. People are welcome to criticize his government, he said, but if the criticism was being made by party leaders, then he would expect them to raise the issues within the party.
Admitting that the meeting was crucial, he added, the state is in no political turmoil and I know how to run a coalition government by taking all the partners into confidence.
Munda was in the city to take part in a foundation-stone-laying ceremony for 12 rehabilitation houses for leprosy cured persons in Burmamines. The rehabilitation houses are being built by the Jamshedpur unit of Bharat Sevashram Sangha with financial help from local industrialist Raj Kumar Agarwal.
Munda claimed that the state, particularly Singhbhum-Kolhan region, is witnessing a surge in mega investment proposals from the world leaders in the field of iron and steel manufacturing. Several new projects will come up with hundreds of crores of investment in the steel sector. The Essar group has also shown interest to shift their recently-acquired plant in South Korea to Jharkhand, claimed the chief minister, conceding that the state is yet to develop the required infrastructure.
We will ask the Centre to help the state. Private partnership will also be invited for developing the infrastructure, Munda said. He informed that Adhunik Steels, which has inaugurated its plant in adjoining Seraikela-Kharsawan, had also applied for the establishment of a 1000 MW thermal power plant in Chandil, which is under consideration of the state government.
Essars Iron Ore plant ready
Essar group will set up a steel plant in the tribal Bastar region while its iron ore beneficiation plant, established at an estimated cost of Rs 1000 crore here, is all set to be commissioned later this month.
Essar group General Manager (Corporate affairs) Pradeep Tandon said the work on 267-Km-long pipeline from Bailadila to Visakhapatnam had already been completed.
Iron ore in slurry form will be pumped through this pipeline, which is the second longest in the world, to Visakhapatnam, he said UNI.
Use of the pipeline would help save huge cost on transportation of iron ore besides keeping the environment clean, Tandon said adding that trials of pumping of iron slurry through this pipe line was being carried out.
Essar Steel, a major group with assets valued at more than Rs 20,000 crore, has also decided to set up a steel plant in tribal Bastar region. The state government had already granted clearance for the proposed project. The MoU for setting up the plant is expected to be signed with the state government within a fortnight, he said.
According to an Essar spokesman, the group's steel complex at Hazira operates the world's largest gas based sponge iron plant. Its steel plant has a capacity of three million tonnes per annum, which is expected to go up by 4.6 MPTA by next year.
Besides, Essar power is India's first independent power producer with a capacity of 515 MW, meeting approximately seven per cent of Gujarat's power needs. The company has also plans to enter transmission and distribution of power.
Moreover, the group has also stake in executing and operating large gas-based power plants, petroleum sector, telecom, shipping and construction, including of industrial projects, civil and irrigation projects, off-shore and on-shore pipelines, marine projects, highways and expressways.
Tata Steel raises the bar
Tata Steel aims to increase its capacity to at least 30 million tonnes (mt) in the next 10 years.
Till now, the company was eyeing 15 million tonnes, to be achieved by 2010 at an investment of Rs 25,000 crore.
At present, its annual production is 7 mt with the Jamshedpur plant producing 5 mt. The acquisition of Singapore-based Nat Steel has also increased its capacity by 2 mt. Nat Steel has plants in six countries in Asia and Australia.
We have been holding talks on our production target for the next 10 years. We are looking at a 30-mt capacity by 2015, Amit Chatterjee, adviser to the managing director of Tata Steel, said.
India will produce 120 mt of steel by that time and Tata Steels share will be at least 25 per cent, he pointed out.
Chatterjee said Indian companies must step up capacity to stave off competition from China, which might produce 500 mt steel by 2015.
If we do not prepare ourselves, they will swamp our market, he said on the sidelines of a seminar in Calcutta last week.
He made it clear that new capacity addition will be dispersed among many countries.
The company has already ventured overseas through Nat Steel and is eyeing a gas-based plant in Iran. Its talks with Bangladesh are also at an advanced stage.
Nat Steel gives the Tata access to Malaysia, Thailand, Vietnam, the Philippines, Australia and China.
The development gains significance in the light of Poscos commitment to build a 12-mt steel plant in Orissa. After hanging fire for a long time, the deal finally went through recently.
Mittal Steel, the worlds largest steel maker, is also considering a 10-mt plant in Jharkhand.
The entry of these two companies will change the dynamics of the Indian steel market. The domination of Tata Steel and the Steel Authority of India Ltd, which together control 40 per cent of the domestic market, may come to an end.
Realizing the potential threat, both companies, along with other integrated steel players, like Essar, Ispat and JVSL are expanding capacities.
The quest for long-term iron ore supplies, the key raw material in steel, has brought Posco to India. The same holds true for Mittal Steel, which is trying to get a pie of the resources in Jharkhand.
Tata Steel is also wrapping up deals with many states. While it is augmenting capacities at Jamshedpur, its new facilities are in various stages of development in Orissa and Chhattisgarh. These three eastern states put together have the bulk of domestic iron ore reserves.
Essar`s Bastar steel plant deal tomorrow
The Chhattisgarh government will sign a memorandum of understanding (MoU) with the Essar group for a steel plant in the Bastar district of the state by the latter, on July 5.
Last month, the state government signed a MoU with the Tata, who also plan to set up a steel plant in the district. Chhattisgarh Chief Minister Dr Raman Singh discussed the plans on investment in a meeting with the Bastar Development Authority on Saturday.
The two mega steel plants would not only expedite socio-economic development in Bastar and generate employment opportunities for locals, but will also utilize the iron ore stocks of the district in their plants, Singh told Business Standard.
Impressed by the new industrial policy of the state, the Essar group has proposed to invest Rs 5,000-8,000 crore in Bastar, Singh added. However, he said the capacity of the plant and the schedule for installation would be disclosed later.
Tata Steel embarks on expansion plan at Jamshedpur
As part of its vision to become a 15 million tonne steel company by 2010, Tata Steel has initiated a two million tonne expansion programme at its Jamshedpur plant at an expenditure of over Rs 7,000 crore.
The company started the expansion programme by deciding yesterday to place an order with M/s. Outokumpu and L & T for setting up a two million tonne iron ore sinter plant, Tata Steel sources here today said.
The sintering process makes iron ore fines suitable for use in iron-making in blast furnaces.
Outokumpu was a technology leader in the field and has designed 300 such plants across the world including the three existing sinter plants at the Jamshedpur plant.
Tata Steel's capacity has gone up to five million tonne with the completion of one mt expansion at its Jamshedpur plant at a cost of about Rs 2,000 crore.
Tata Steel had invested in Nat steel Asia, which has a capacity of about two million tonne of finished steel.
The company had recently signed a MoU with the Chhattisgarh government for setting up a five mt Greenfield integrated steel plant.
Apart from this, it had last month signed a joint venture agreement with Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) under which it would set up manufacturing projects of six mt.
This included setting up of a 1.5 million tonne steel slab making facility, another 1.5 million tonne steel billet making unit and a separate three million tonne export oriented steel plant.
CPM takes out march to sponge iron unit
Hundreds of CPM activists took out a march to the sponge iron unit in Malampuzha demanding that the work on the factory be stopped immediately since it would pollute the water of the dam from where the drinking water needs are met.
The march, which began from the Chebana Junction, was stopped by the police before the factory site. M Chandran, state committee member of the CPM, who inaugurated the meet, said that the party would not allow the unit to function since it was against the interests of the people.
He said that power-intensive units like sponge iron and steel-smelting units have caused pollution and did not generate any local employment. He said that such units are placed in the negative list in other states but the Kerala Government was encouraging them.
He said though the panchayat has not issued any license to the factory the unit was going ahead with the construction work citing legal clearance.
K V Ramakrishnan, president of the district panchayat, presided over the meet. Among those who spoke were N N Krishnadas MP, T N Kandamoothan, P A Gokuldas and CITU district president A Prabhakaran
Gujarat NRE set to diversify
Gujarat NRE Coke Ltd (GNCL) is diversifying into steel making and power generation.
The largest domestic non-captive metallurgical coke producer is setting up a 3-lakh-tonne-per-annum steel rebars facility at Gandhidham in Gujarat at a cost of about Rs 50 crore.
The company will make rebars from sponge iron, scrap and ferro alloys.
A top Gujarat NRE executive said the project would be completed by December 2005.
The 20-mw power plant, at an investment of Rs 80 crore, will be ready by December 2006.
It will utilize the waste heat recovery model to generate power. As a result, the cost will be Re 1 per unit compared with close to Rs 5 we are paying now, a top GNCL executive said.
Initially, the company will mostly use sponge iron from the market to make rebars.
Six months after the steel mill start working, the company intends to go for backward integration and set up a sponge iron manufacturing facility as well.
According to initial estimates, the capacity will be equal to that of steel making (3 lakh tonnes). GNCL will invest another Rs 50 crore in the sponge iron facility.
The company plans to use iron ore from its newly acquired Australian mining unit to feed the sponge iron plant.
By the time the sponge iron unit is ready, mining is likely to begin in Australia, the company executive added.
GNCL has acquired a 30 per cent stake in Zinico Resource NL, which has secured prospective iron ore and base metals projects in Tasmania in close proximity to existing world-class mining projects.
The company claimed that it would still be cheaper to import coal from Australia than wheel it to Gujarat from mine heads in the country.
The ocean freight from Australia to Gujarat ports is about $30 per tonne. On the contrary, inland freight from Orissa or Karnataka to Gujarat is $37 a tonne, the executive said.
However, the company is still keeping the option open for local procurement of ore.
The company will have raw material security of iron ore from the very beginning compared with other big integrated steel companies like Ispat and Essar.
The company intends to fund the expansion plan through FCCB and internal accruals.
Steel plants across the world are making a beeline for mines to hedge against irregular supply as well as soaring prices.
The Gujarat NRE Coke stock, which opened at Rs 124.70 on Friday closed at Rs 122.10, down Rs 2.60 or 0.85 per cent, on the Bombay Stock Exchange.
Pollution norms up in smoke
The Karnataka government clears a sponge iron factory in a reserve forest unmindful of the pollution it will cause.
An ecological disaster is looming large over Londa, a sleepy town on the Karnataka-Goa border. The Kundil group, a Goan enterprise known for its steel bars, is building a sponge iron factory, a power plant and a ferro alloy unit in Kumry Londa, near the freight-busy Londa railway station. The site is close to the Dandeli wildlife sanctuary and the Sahyadri reserve.
Aluminum project to boost Andhra economy
The Andhra Pradesh government has signed a memorandum of understanding (MoU) with steel major O.P. Jindal group for setting up an aluminum refinery and smelter near Visakhapatnam, officials said.
The MoU was signed Friday between government officials and Jindal South West Holding Ltd (JSWHL), a part of $4 billion O.P. Jindal group.
The Rs.90 billion project is expected to begin production in three years and boost the state's industrial development and marks the entry of the Jindal group into aluminum.
While the refinery will have a production capacity of 1.5 million tonnes per annum, the smelter will produce 0.25 million tones annually. The project will generate about 10,000 jobs.
The Andhra Pradesh Mineral Development Corp will supply bauxite, which it will mine exclusively for this project.
JSWHL also plans to set up a 650 MW power plant to meet the project's power requirements.
At a time when the Andhra government has been under attack for claiming that Germany's Volkswagen proposed to set up a car plant at Visakhapatnam, striking the aluminum deal seems to have lifted the government morale.
B'desh agrees to give 1,800 acres to Tata for power plants
Bangladesh has agreed to give India's Tata group 1,800 acres of land for establishing steel and power plants under a USD 2.5 billion investment plan.
On the first day of a second round of long-drawn negotiations today, the government offered the land near the Ruppur Nuclear Power Plant project at southwestern Iswardi district, private UNB news agency reported.
Quoting unidentified sources, the agency said the Tata team accepted the offer in principle, but a reply would be made after visiting the area.
Earlier, Tata had said they required 2,400 acres of land for its three projects--a 1000MW power plant, a steel mill and a fertilizer factory. They had wanted 2,000 acres at Iswarid in Pabna district to set up power and steel plants and 400 acres at Banshkhali in Chittagong to set up a fertilizer factory.
The conglomerate has also proposed to develop a coal mine at Barapukuria in northern Dinajpur district.
After the opening talks that lasted about one hour and a half, Finance Secretary Zakir Ahmed Khan who led the Bangladesh side told reporters "we can only say we are making very good progress." He did not elaborate.
Alan Rosling, the head of a 20-member Tata negotiation team, also echoed the Bangladesh official.
The current second-round of negotiations would continue till July 7.
Earlier, the first round of negotiations took place on May 25-27. The second round was supposed to begin on June 19, but the government changed the schedule.
Executive Chairman of the Board of Investment (BoI) and Advisor of the Energy Ministry, Mahmudur Rahman, told reporters that the four major issues, out of total seven, which would be highlighted are land allocation, tenure of gas supply, purchase of electricity and mining technology to be used in the proposed coal-mine project. The three others that would be discussed in the third and final round are tariff of electricity to be purchased from Tata power plant, price of gas to be supplied to the Tata Steel mills and fertilizer factory and the fiscal incentives to be offered to the projects. He hoped negotiations could yield progress. "We are hopeful of concluding the negotiations by August 31," Rahman said.
Bangladesh to hire experts for Tata deal
Bangladesh is to appoint two foreign consultants soon to deal with the crucial gas and electricity pricing for India's Tata group.
The decision came as the second round of talks on Tata's $2.5 billion investment plan kicked off here Saturday.
"The gas and electricity pricing is a very important issue. We will soon appoint two foreign consultants," Mahmudur Rahman, executive chairman of the Board of Investment and advisor to the energy ministry, told reporters after talks with Tata officials.
He said he has already issued an order on appointing a consultant to assess the various aspects of gas pricing. The power ministry will appoint another consultant to take decision on electricity pricing.
Bangladesh has agreed in principle to ensure supply of natural gas for 20 years for the Tata projects.
Tatas plan to set up a $700 million power plant with a capacity of 1,000 MW, a $600 million fertilizer plant with a capacity to produce one million tonnes a year and a $700 million steel mill of 2.4 million tonnes capacity.
To run the plants, Tatas would require up to 600 million cubic feet of gas per day.
Both sides Saturday discussed issues relating to site selection for the plants, power purchase, incentives for investment by Tata and coal exploration, Rahman said.
"Both sides were very much positive during the negotiation. We are gradually progressing towards a deal," said Alan Roseling, executive director of Tata Sons, after meeting Finance Secretary Zakir Ahmed Khan
Posco planning to set up minor port
Korean steel major Pohang Steel Company (Posco), which is planning a port-based steel plant in the State may not use Paradip Port at all.
Though Posco has selected Paradip as the site for its proposed 12 million tonne steel plant, it is not inclined to make use of the existing port facilities. The steel major, sources said, is seriously considering setting up a minor port, dedicated to itself, at Jatadhari, about seven kilometre from Paradip.
The plan stems from the necessity to have a dedicated port facility for handling the huge volume of ores and minerals required for the Rs 52,000 crore steel plant project.
Though Posco had earlier explored the possibilities of using the existing facilities at Paradip Port by developing dedicated berths, it reportedly found setting up of a new minor port more feasible.
In fact, the MoU also allows Posco to develop a new minor port adjacent to the existing major port at Paradip.
The State Government is keen on a new minor port at Jatadhari because of revenue considerations, said official sources.
A minor port would be completely under the administrative control of the State Government. Moreover, the entire revenue benefits would go to state exchequer, which has the Government brimming with excitement.
The State Government, in the MoU, has already made it clear that if Posco decides to develop a minor port, it would consider the grant of necessary permissions under the existing policies including clearance from the Union Ministry of Environment and Forests under Coastal Regulation Zone (CRZ).
The new port may be constructed either on build-own-operate (BOO) or build-own-operate-transfer (BOOT) and build-own-operate-share-transfer (BOOST) basis.
The necessary infrastructure and logistic support along with facilitation of power and water supply for establishing the port would be provided by the State Government, sources added.
Jharkhand at a Glance
CPM state secretary Gyan Shankar Majumdar, who was in Hazaribagh to inaugurate the office of DVC Shramik Union, spoke to the press on Sunday on the chief ministers forthcoming tour to Britain on July 9. He said his party would not oppose the governments move towards development.
The secretary said the fact that the steel tycoon Lakshmi Niwas Mittal is interested in the abundant iron ore of Jharkand should be kept in mind while reaching the final agreement with the multi-national company.
Majumdar, however, criticised Arjun Munda for his hurriedness to sign agreements with multinationals. This will, Mazumdar said, give a chance to companies to exploit the mineral resources.
According to him, government should keep the interest of local people first. These multinationals should assure government first that they will give first preference to residents of the state.
Boost for RSP staff
Rourkela Steel Plant (RSP) has issued promotion orders today elevating 2239 non-executives employees to the next higher grades within the cluster.
At the same time 248 executives were also promoted to the next higher grades E2, 3,4 and 5.
The promotion orders are issued for suitable candidates. These include candidates eligible for promotion within the non-executive cadre twice every year on 30th of June and 31st December.
Over the last four years Rourkela Steel Plant has established the practice of issuing these order on the due dates without fail, demonstrating its commitment to provide employee promotions right on time.
Out of the total 2239 promotion orders in the non-executive cadre, 1770 were effected in the works area and the remaining were for the non-works area.
In the promotes in the executive cadre 97 belonged to the non-works areas and the rest to the works departments.
For promotion to E3 and 4 grades, the process involves the holding of interviews and finalisation of selection and all the formalities were completed to enable the timely issue of promotion orders.
Dr. Sanak Mishra, the MD of Rourkela Steel Plant has continuously emphasized on timely issue of promotion orders and how it bolsters the the entire workforce. Besides taking care of the requirements that will provide the ambience for the employees to shoulder the responsibilities that will take RSP forward.
Perhaps the Rourkela Steel Plant is the only unit in SAIL to complete the issue of promotion order on due date for the fourth year in succession.
The MD himself handed over the promotion orders. He handed over thepromotion orders to the persons promoted to the E5 grade, while GMs and Heads of the Departments in their respective areas arranged to hand over the promotion orders to the promotees
FDI limit in mining to stay
The ministry of mines has rejected a proposal from the industry ministry to raise the foreign direct investment limit for the mining of diamonds and precious stones from 74 per cent to 100 per cent.
The proposal to allow 100 per cent FDI for coal mining by cement and steel companies is, however, expected to go through since the coal ministry has taken a stance that it is just a corollary to what is already available to power companies which want to mine coal.
The mines ministry is of the view that doing away with the cap with respect to diamond and precious stone mining is not required since it is not coming in the way of investment in the sector.
It is not a major issue with prospective foreign investors. The real hurdle in attracting investment lies at the state government level since mining requires numerous approvals, said a ministry official.
This will mean that multinationals like De Beers and Rio-Tinto may have to wait for mining of diamonds and precious stones to be liberalised in the country.
The ministry also anticipates political opposition to the proposal since mining of precious stones and diamonds can lead to local level resistance, especially in states ruled by non-UPA parties.
Officials in the Department of Industrial Policy and Promotion (DIPP), from where the proposal orginated, said the note on opening up of the sector would be circulated to the Cabinet despite opposition from the mines ministry. We will let the Cabinet take a final view on the matter, an official said.
The contention of the industry ministry is that allowing 100 per cent FDI through the automatic route is aimed at simplifying procedures.
Even if we allow 100 per cent FDI through the automatic route, there are permissions required for mining. The intention is to at least do away with the requirement to come to FIPB, an official said.
The proposal for removal of FDI cap in mining is part of a note on comprehensive rationalisation of FDI procedures prepared by the DIPP for the consideration of the Cabinet.
Under the current norms, 100 per cent foreign owned companies can be set up without seeking FIPB clearance for mining of 10 major minerals and all minor minerals except diamonds and precious stones
Monnet in talks to buy domestic, overseas mines
The Monnet Ispat group is in final stages of talks to acquire iron ore and manganese ore mines overseas, in addition to two iron ore mines from private players in Jharkhand.
In all probability, the overseas acquisitions will be in the Gulf and CIS regions. A formal announcement to this effect will be made next month.
Executive vice-chairman and managing director Sandeep Jajodia said the company was in talks with two private players for acquiring two mines of 25 million tonne proven reserves in Raigarh. All expansion plans by June 06 in the region will come at a cost of Rs 600 crore.
Jajodia also said that talks were in final stages for acquiring overseas iron ore mines with proven reserves of 250 million tonne and another mine of 25 million tonne of manganese reserves
The expansion in Raigarh will include increasing sponge iron production capacity to 0.8 million tonne from 0.3 million tonne. The company will also be increasing steel capacity production by 0.4 million tonne from the present capacity of 0.3 million tonne. The company will also be setting up an 250 mw power plant. Already the company is producing electricity at Rs.1.20 a unit.
Approximately, Rs 230 crore would go towards sponge iron expansion, Rs 300 crore to set up power plant and the balance towards steel, said Jajodia. He also hoped that these plans should be completed by June 2006.
Raising funds should not be much of a worry for the company. On the financial front, the company looks healthy as the company reported a 337 per cent growth in net profit at Rs 123.83 crore for the year ending March 31, 2005, said a Mumbai-based steel analyst.
Earlier this year, the company had released a press release saying that it would be listing its 60 million dollar foreign currency convertible bonds on the Singapore Stock Exchange
Rana group to expand outside UP
The Rana group of industries, one of the major rolling steel production companies of North India, will establish a steel girders production plant in Orissa at Rs 125 crore.
According to the group director, Zafir Rana, keeping in mind the power crisis all over the country, the new unit will have its captive power plant.
Besides, Rana said the Muzaffarnagar-based company, established about 25 years back, was running eight units in UP and Uttaranchal.
According to Rana, after UP and Uttaranchal, Orissa is the first state outside North India where the Rana group has established its presence and the new plant will produce steel girders, rods and channels for Orissa, Bihar and West Bengal
Shree Steels plans Rs 224 cr spread
Shree Precoated Steels, a member of the Rs 1,300-crore Ajmera group, has embarked on a Rs 224 crore expansion in the cold rolling mill (CRM) and galvanising prepainted (GP) and colour-coated (CC) products.
The production capacity of the CRM will be increase from 220,000 tonne per annum (tpa) to 540,000 tpa and that of CC products will be raised from 90,000 tonne to 120,000 tonne.
The company has already installed a high speed galvanising line to produce over 300,000 tonne of GP product.
A spokesperson of the company said the CRM capacity will be hiked by installing the high speed 4-high CRM with flatness control system and level-2 automation to produce finished cold rolled coils at a top speed of 1,400 mpm
For CC products, near infra-red curing technique-based colour coating line will be installed.
The expansion projects are expected to put in place key capabilities that will make the company a leader in the domestic steel market and a significant player in the export market.
The companys exports in 2004-05 rose 56 per cent from Rs 308.21 crore in 2003-04 to Rs 481.79 crore. The induction of new member countries into the European Union has opened up new markets for exports for CR, GP and CC products.
The proposed expansion will be financed through term loans, rights issue of equity shares and internal accruals.
The Allahabad Bank has given a term loan of Rs 50 crore. State bank of India, its associates and other financial institutions have also sanctioned loans.
The company proposes to raise Rs 51 crore from the rights issue. It has proposed to issue 2.55 crore equity shares in the ratio of one equity share of the company for every two shares held.
The shares with Rs 10 face value will be issued at a premium of Rs 10 per share. The stock is currently quoted at Rs 42 cum right on the Bombay Stock Exchange.
The Ajmera group has established itself as one of the leading residential and commercial property developers in the country.
The group also has a strong presence in cement, textiles, printing, IT and entertainment park.
Uttam Galva raises $15 million
Galvanised steel manufacturer Uttam Galva Steel Ltd has raised $15 million of External Commercial Borrowings (ECBs) to fund its Rs 400 crore expansion plans to double capacity to one million metric tonnes per annum.
The Syndicate Bank has issued $5 million as ECB while Bank of India has issued the rest $10 million at interest rates two per cent above the current three months' LIBOR, Uttam Galva Director Ankit Miglani said today.
Its expansion plans include commissioning of a 6-HI Reversible Cold Rolling Mill which would increase its cold rolling capacity by 50 per cent to 7.5 lakh MT per annum.
Uttam Galva was aiming to double its turnover to six lakh tonnes during the current fiscal from 4.5 lakh tonnes in the last fiscal.
The company board has given the sanction for raising funds to the tune of $60 million through various finance options, he said.
BJP raises questions over Posco deal
The $12 billion Posco deal for the construction of a steel plant may have been hailed as the biggest-ever FDI in India, but it has landed the Naveen Patnaik government in Orissa in trouble.
The entire opposition had objected to the company's right to export ore and wanted it to buy the raw material at international prices.
Now the same views have been echoed in a letter written to the Chief Minister by the state president of the BJP, which happens to be part of the ruling alliance in Orissa.
"The company should not be allowed to export 30 per cent of the ore to Brazil for exchange purpose. Secondly, Posco should buy ore from the market. It should not be given any lease," said Juel Oram, President, BJP, Orissa.
Oram has also sought clarifications about the amount of revenue and employment to be generated by the project.
He says the figures projected by the state government are grossly exaggerated and the party high command appears to back the state leaders on this.
"The BJP welcomes the investment by Posco, but at the same time it wants the controversial points to be resolved satisfactorily," said Rajnath Singh, General Secretary, BJP.
But Chief Minister Naveen Patnaik does not appear to be a conciliatory mood.
"I think Juel Oram has some misconceptions about the MoU. The correct facts will be appropriately given to him," Patnaik said.
Bitterness between the ruling alliance partners is nothing new. But the fact that the UPA government at the Centre has played the catalyst in pushing the Posco project in Orissa could complicate matters.
CERC threatens to cancel licences of Tata, Reliance, 11 others
Upset over non-compliance of licence agreement for inter-state trading in power, the Central Electricity Regulatory Commission (CERC) has threatened to cancel the licences of 13 companies including Tata Power, Reliance Energy, NTPC and PTC India.
The CERC has rapped the trading companies for not submitting the required information every quarter to the power regulator and has now issued notices to the companies asking them why their licences should not be revoked for non-compliance of licence conditions.
As per the licence agreement for inter-state trading in electricity, all the companies have to submit quarterly information to the regulator as well as to the Regional Load Dispatch Centre and Regional Electricity Board.
However, the regulator observed that these trading companies have not been submitting the information regularly to the authorities and asked for their explanations. The Commission has given the companies time till July 15 to file their reply.
The companies include big guns such as Tata Power Trading Co Ltd, Reliance Energy Trading Co Ltd, PTC India, NTPC Vidyut Vyapar Nigam Ltd and MMTC Ltd.
The regulator has also issued notices to Adani Exports Ltd, DLF Power Ltd, Jindal Steel & Power Ltd, Sumex Organix Pvt Ltd, Lanco Electricity Utility Ltd, GMR Energy Ltd, Chhatisagarh Electricity company Ltd and Karam Chand Thapar & Bros Ltd.
Tata Steel completes Q1 on buoyant note
Tata Steel completed the first quarter of financial year 2005-06 on a buoyant note with significant increase in its liquid iron and crude steel production.
The liquid iron, commonly known as hot metal, recorded at 1.21 million tonne, which is 6.5 per cent higher as compared to volumes in the first quarter last year, according to the press release issued by Tata Steel here on Saturday.
The crude steel production was recorded at 1.11 million tonne, which registered an impressive increase of 5.3 per cent, the release said.
The gains are noteworthy considering the fact that company's largest furnace, the revamped 'G' furnace, was commissioned in April and reached the rated capacity in the second half of May, the release said, adding that with the increased iron making capacity, the company's dependence on purchased metallics has gone down substantially.
Meanwhile, Tata Steel's journey on its two million tonne expansion programme has started yesterday and the first step has been taken by deciding the order on Outokumpu and L & T, for setting up a two million tonne iron ore sinter plant.
Outokumpu is a technology leader in this field and has designed 300 such plants across the world including the existing three-sinter plants at Jamshedpur works.
The one million tonne expansion programme at Jamshedpur is near its completion, the release said, and added that Tata Steel has now initiated a further two million tonne expansion programme in line with its vision of becoming a 15 million tonne steel com pany by 2010. - PTI.
NCDEX to launch brent crude, furnace oil futures
The National Commodity & Derivatives Exchange (NCDEX) will soon launch futures trading in Brent crude oil and Furnace Oil. The exchange has submitted the contracts to the Forward Markets Commission (FMC) for approval.
NCDEX is the second exchange in the country to launch energy futures. The first being Multi Commodity Exchange (MCX), runs futures trading in light sweet crude oil and brent crude.
Furnace oil is a dark viscose residual fuel obtained by blending mainly heavier components from crude distillation unit, short residue and clarified oil from fluidised catalytic cracker unit. It is also known as bunker fuel, fuel oil, heating oil etc.
In India, furnace oil is the third largest cut of crude barrel after high speed diesel (HSD) and superior kerosene (SKO). But unlike HSD and SKO, the prices are not administered by the government and it is freely importable. In fact, it is the largest non-APM petroleum product in the country.
Every small and big town has furnace oil dealers. A large quantity of furnace oil is imported into country. The domestic oil refining and marketing companies export substantial quantity as they are not able to sell it in domestic market due to various reasons. In fact, both the imports and exports of furnace oil from the country suggest an absence of efficient price discovery mechanism for both producers and consumers.
The pricing of other heavy distillates such as low sulphur heavy stock (LSHS)/residual fuel oil (RFO) are also based on furnace oil prices. Furnace oil and LSHS are used in various industries as fuel and feed stock and the market size of these oils is growing at the rate of 10% per annum. The major user industries include power, shipping/transport/ fertilizers, textiles, chemicals, iron and steel, plantation and others.
The contract is expected to provide hedging mechanism to the corporates of these sectors for their fuel price risk. Since, it is well integrated with the global market and also has close correlation with diesel prices, the Indian contract will also serve as risk management tool for diesel users.
Indian corporates have significant exposure to energy costs. They cannot hedge this price risks on international exchanges, as they do not have any physical import exposure owing to RBI regulations. Their energy costs are highly correlated with crude prices. There fore a crude contract on a domestic exchange would help them significantly hedge their energy costs.
