July, 09 2005
BUDA attaches Jindal Vijaynagar Steel's property
Armed with the orders of the Karnataka High Court, the Bellary Urban Development Authority (BUDA) attached the property of Jindal Vijaynagar Steel Limited (JVSL) and sealed the administrative block as it failed to pay its dues to BUD A, here on Friday.
BUDA sealed the Human Resource Department of JVSL and also attached the property of its sister concern Jindal Thermal Power Corporation Limited (JTPCL).
The authorities allowed the factory to run for the benefit of workers. The Jindal officials did not resist the BUDA's action.
The BUDA Chairman Zahir Ahmed, Commissioner N Raju and officials, Sandhur Tahsildar, police force and a fire engine rushed to the site this morning.
The JVSL and its sister concerns owe a sum of Rs 13 crore towards development charges
Oram fires yet another salvo at Naveen
Close on the heels of his utterances against certain provisions of the Posco deal, BJP state unit president and former Union minister, Mr Juel Oram, today fired another salvo at the chief minister, Mr Navin Patnaik, over the recent MCC attack in the Jujumura area, which claimed five villagers.
Mr Oram had dashed off a letter to the chief minister a few days ago, raising certain questions over the memorandum of understanding signed between the state government and the South Korean steel major, Pohang Steel Company (Posco).
He had alleged that certain provisions, including the ironore export to Brazil, would be detrimental to the states interest.
Mr Patnaik had retorted saying that Mr Oram had some misconceptions and the correct facts would be provided to him at the appropriate time.
Steel cos forced to give in to Chinas discount demands
Indian stainless steel makers are falling prey to widespread arm-twisting by Chinese importers. With demand for stainless steel in China having dipped in the past few months, the Chinese are asking Indian exporters to offer hefty discounts on their consignments.
Recently, Shah Alloys, a Gujarat-based steel manufacturer, has shelled out close to $1.1m as discount after demands by a Chinese importer. The discount is a part of Chinese strategy to lower their costs whenever the demand is low, a source said.
In the past four months, the four consignments of different types of steel were seized at the Shantau Port in Shantau Guangtung province in China. The size of the four consignments is close to 5,300 tonnes.
The total consignment was released only after the company paid $1m as discount to the receiving company, sources in the industry told ET. They added that more stainless steel exporters from India are being pressed for similar discounts. The imported stainless steel is mostly used in manufacturing pipes, tubes and utensils and is exported as sheet coils.
The Chinese importer Minmetals Steel Company had obtained a court order seizing the whole consignment whereby Shah Alloys was prevented from transferring the same.
The Rs 1,230-crore company had been subject to similar demand from the Chinese importers last year when they had to give a discount of $1 lakh.
Stainless steel is sold to Chinese companies mainly through letter of credit (LC) whereby a document is issued by the bank of the importer that essentially acts as an irrevocable guarantee of payment to the beneficiary
Though the company was paid in full as per the LC the Chinese importer did not offtake their consignment and instead served the company with legal notice.
When contacted, the company senior vice president (exports) DPS Bindra confirmed the Chinese action but refused to divulge any details. We are now looking at exporting more to other Southeast Asian countries like Thailand and Malaysia but immense demand in China still makes it a favourite destination for exports, Mr Bindra said. Shah Alloys has so far exported about 600,000 tonnes of stainless steel to China.
The company is the second largest manufacturer stainless steel in India after Jindal Stainless. In 04-05 the company posted a turnover of Rs 1,228 crore and registered a net profit of Rs 44.2 crore
Orissa firm in refractory deal
The booming steel market has attracted Ucar Carbon of the United States, a leading manufacturer of carbon-based refractories, to the country.
It has tied up with Orissa-based Sarvesh Refractory to tap the local market. Ucar Carbons technology is popular in the US and China.
According to Peter Sylven, sales director at Ucar, its technology will help in expanding the life of blast furnaces to at least 15-20 years.
The average campaign life of blast furnaces in India is about 7-8 years. Sylven claimed that it could go up to a minimum of 15 years by using Ucars technology. However, the cost would remain almost the same.
The US company, part of Graftech International Ltd, enjoys a majority market share in China. Every year, Chinese steel companies are adding more capacity than Indias total production.
For instance, in 2004 and 2005, all blast furnaces in China used the Ucar technology for furnace lining. Baosteel, Chinas largest producer, is setting up furnaces using this technology.
The rapid addition in steel capacity will slow down after the 2008 Olympics. It will move towards India, said John Davidson of Lincs Ironmasters, consultants for the steel industry.
Ucar officials have been talking to domestic steel companies.
In India, blast furnaces have been small in capacity and plagued with various teething problems leading to low productivity. The tie-up with Sarvesh will help market Ucars products in India. Moreover, the local partner will also offer total refractory solution to upcoming projects. The company has recently acquired two units, one in Andhra Pradesh and the other in Gujarat, said R.C. Biswas, Sarvesh director
India becomes investment hotspot
Indias backyard is fast pushing out Chinas investment showcase. Orissa, Jharkhand and Chhattisgarh are emerging as the biggest investment destinations in the world, leaving behind the current global industrial hotspots like Guangzhou and Shenzhen in China. The three tiny states have already received investment commitments close to $40 billion. More are still pouring in.
Sample this: Korean steel major Posco has signed a memorandum of understanding (MoU) for a $12 billion investment in Orissa for setting up a 12 million tonne (mt) steel plant, Essar Group has inked an initial agreement with the Chhattisgarh government for a 3.5-mt steel plant at a cost of a tad below $1 billion. Jindal Steel and Power has struck an MoU with the Jharkhand government for setting up a $2.5-billion steel plant.
Industry analysts said it could be the first time that such massive investments in a single sector in a single country could be taking place. In the past, countries like China might have attracted massive investments but they were in various industrial sectors and spread over some time span, they said.
The other big-ticket investment proposals in the three states for which in-principle understandings have been reached include Tiscos $2-3 billion plant in Chhattisgarh, Essar Groups $1-billion plant and Jindal Stainless Steels $1.5-billion investment proposal in Orissa
Jindal South West Steel (earlier Jindal Vijayanagar), which has announced a $2-billion investment for capacity expansion, Maharashtra Seamless $1-billion project and Bhushan Steels plans for a $1.5-billion investment for capacity expansion, are the other mega investment proposals on the cards.
The massive jump projected in domestic demand for steel is obviously the main driver for the current expansion spree by steel majors. But the doubting Thomas remain sceptical. The numbers are, no doubt, highly impressive but their implementation has to be seen, a senior executive with a leading investment bank said.
Industry insiders are, however, confident. Unlike six-seven years ago when domestic steel companies expanded their capacities based on the rosy demand projections but ended up creating a huge surplus, this time around it is based on realistic projection figures.
There is massive growth happening in most of the industrial sectors whether it is infrastructure, auto and housing, and this would mean a huge growth in demand for steel, says Arvind Parakh, finance director of Jindal Stainless.
Consumption of steel in India is projected to go up from the current level of 36 mt to 60 mt by 2010 and 100 mt by 2015. The additional capacities planned currently are just about in the same proportion as the projections in demand growth
Besides, the actual implementation of the projects would depend on their success in getting the raw material linkages, besides tying up the necessary capital. There is, therefore, no surplus capacity creation expected in this phase, said a senior executive in Essar Steel.
Availability of capital at interest rates almost at par with rates available at the international market is another factor which has emboldened the domestic steel majors to undertake big capacity projects.
Leading steel companies are now able to access long-term capital at 7-8% interest rate. Coupled with availability of raw materials in states like Orissa, Jharkhand or Chhattisgarh, this is the best opportunity for Indian companies to scale up their operations to international standards and competitiveness, points out an industry analyst.
Interestingly, the current massive expansion in capacities is also resulting in a consolidation in the industry. While the biggies are scaling up their operations in a big way, the small players are fast becoming unviable and are slowly getting out.
There is a churning happening in the domestic steel industry and soon only a handful of players would be able to survive, a senior banker said
Hello FDI! Orissa to spend $1.2bn in infra
India will spend $1.2 billion in four years on roads and rail links for factories and mines planned by South Korea's Posco, Vedanta Resources Plc. and Tata Steel Ltd. in Orissa.
Orissa, which holds 25 per cent of India's reserves of iron ore used in making steel, aims to complete the transport links by 2009, a year before Posco's $12 billion mine and steel plant start production, said Naveen Patnaik, the chief minister of Orissa, in an interview.
At the moment, we don't have the basic infrastructure to support the investments that the state is attracting,'' Patnaik, 58, said in the state capital of Bhubaneswar. The government is giving priority to developing the state infrastructure.
Posco, the world's fifth biggest steel producer, is making the largest single overseas investment in India to get access to raw materials after faster-than-expected economic growth in China drove up iron ore prices 71.5 per cent this year. India has the world's sixth-biggest deposits of iron ore, according to U.S. Geological Survey figures.
If you want large amounts of money to come in, then the state must provide the basic infrastructure,'' Anupam Rustogi, Vice President at Infrastructure Development Finance Corp., or IDFC, a state lender, said. Orissa is starting to do that.
Highways
Posco will spend $2 billion on a power plant and a port for its steel and iron ore venture in Orissa. Vedanta has set aside 15 per cent of the $5.5 billion it will spend on steel and aluminum plants to pay for transport links, said Dhanpal Jhaveri, director of corporate strategy.
India has lagged behind rivals such as China in attracting investments in mining, leaving much of the country's 13 billion-ton iron ore deposits untapped.
Orissa has a schedule to develop roads and railways but it's too early to say whether they will be able to translate their plans into reality, Jeong Tae Hyun, General Manager and head of Posco's India project team, said.
Orissa will build five highways connecting steel mills to ports, and adjoining coal-producing Jharkhand and Chhattisgarh states. Work on the roads, costing 27 billion rupees, will be completed by 2009, Minister Patnaik said.
The Indian Railways will spend 20 billion rupees to upgrade a 430-kilometer network. The state and the steelmakers will spend an additional 4 billion rupees on a new 78-kilometer rail line, Patnaik said.
Fishing Boats
The $1.2 billion may not be enough to fund the transport links planned by Orissa. Yet, when combined with the money the steelmakers plan to spend on the basic facilities, the state may be able to stretch the amount, IDFC's Rustogi said.
Patnaik is pushing the government and the companies quite a bit to develop and pay for the projects,'' IDFC's Rustogi said.
He's moving vigorously on the most crucial aspect: acquiring land. Building roads and rail lines is easy if you have land.
Tata Steel, which plans to build a $3.3 billion steel plant and iron ore mine in the state, aims to spend 20 billion rupees to develop the Dhamra port by December 2007. Tata will build a rail line, while Orissa state will pay for the road.
At present, the port, about 50 kilometers down a single-lane road from the main highway, has one concrete jetty where fishing boats unload. No work has started yet, Tata spokesman Sanjay Choudhry said.
Second Chance
Posco's 12 million tons a year plant will give the South Korean steelmaker a production base in an economy where the government expects steel demand to double to 60 million tons in seven years.
Posco's venture is the largest overseas investment in India. For Orissa, where 47 per cent of its 34 million people live below the poverty line, the project was first proposed almost a decade ago.
In 1996, Biju Patnaik, the then chief minister of the state and Naveen's father, invited the Korean steelmaker to set up a steel plant. A plunge in global steel prices soon afterwards prompted Posco to decide against it, said Priyabrata Patnaik, chairman of Investment Corporation of Orissa Ltd.
Orissa state, which earned revenue of $2.2 billion in 2004, expects to earn as much as $184 million annually in sales taxes after Posco's plant begins production. The project will create as many as 48,000 jobs, the state government said in a June 22 statement.
Essar Power close to financial closure for Gujarat project
Essar Power Ltd is in the last leg of achieving financial closure for its 1500 mw gas-based power project in Gujarat. The company has tied up most of the debt component of Rs 3,068 crore (Rs 1994 cr plus $23.2 cr) and is presently in talks with the US Exim Bank for the remaining Rs 500 crore.
The total cost of the project is Rs 4,048 crore with Power Finance Corporation (PFC) as the lead financier to the project. PFC has already sanctioned Rs 576 crore to the company.
Targeting financial closure of this project by end-September, the company has already signed a memorandum of understanding (MoU) with the Power Trading Corporation for evacuation of power.
Confirming the move, chairman and managing director of PTC, TN Thakur, said, The power purchase agreement (PPA) is currently under discussion with the developers. It will be a long term contract for 25 years and the likely beneficiary states will be Gujarat, Madhya Pradesh, Maharashtra, Rajasthan and Delhi. The preliminary study for power evacuation has been carried out by Power Grid Corporation of India Ltd (PGCIL).
The gas supply agreement for the project has been signed with Gujarat state Petroleum Corporation (GSPC) and the project has been asigned a in-principle mega project status.
Essar Power is currently generating 515 mw at its power project in Gujarat. Out of this 215 mw is being consumed as captive power (for its steel plant at Hazira) and around 300 mw is being sold to Gujarat Electricity Board (GSEB). Essar Powers fully owned subisdiary-Bhander Power is producing another 100 mw and is being expanded to 355 mw by 2006
Auto parts makers race to Europe for buyouts
Where do the Indian auto component companies go shopping? Going by the recent acquisitions by the Indian auto component companies, Germany and the UK seem to be the favourite destinations. The presence of some of the big names in the automobile industry like Volkswagen, BMW, Audi and
DaimlerChrysler in these countries and the volumes that come out of these players seem to be the reason for Indian companies to go on a shopping spree.
A closer look at the acquisitions will reveal that the companies that were acquired were either sick or were bankrupt. The fall in sales of some of the auto bigwigs like Ford and General Motors, to which these companies were supplying would have resulted in bankruptcy, say industry experts. The primary reason could be their inability to cope with the increased cost pressures, both from global OEMs as well as the steel price increases. With competitive pricing pressures, it becomes nearly impossible to absorb material price increases, says Amit Kalyani, executive director, Bharat Forge. But there is more to this than what meets the eye. With a facility in such high-cost manufacturing countries, how do these companies find it competitve to manufacture? The acquisitions are aimed at supplying to customers with large volumes. The goods may be manufactured in their facility in India at a low cost and warehoused in the acquired facilities in Germany or UK and then supplied to the OEMs retaining the original brand name, said an industry insider on condition of anonymity. This explains why none of the companies have announced a capacity addition for the acquired facilities. Apart from acquisitions, there are certain unique arrangements like Sundram Fasteners with Bleistahl of Germany where the latter will move equipments to India using which SFL will manufacture. This also gives SFL access to new customers like Volkswagen, Peugot, Honda and BMW, through Bleistahl.
More than the company that we acquire, it is the order book that we get through them, which is exciting. We also get to access the latest in automotive technologies through such acquisitions, sums up KV Ramachandran, Managing Director, El Forge
Mittal S Africa says to benefit from train project
South Africa\'s Mittal Steel may benefit from steel demand for a new multi-billion rand high-speed train project, but would also lose out as some steel would need to be imported, the firm said on Friday.
South Africa named an international consortium last Saturday as preferred bidder for the 80-km (50-mile) train project designed to link Johannesburg and its airport with the capital Pretoria in time for the 2010 soccer World Cup.
\"The Gautrain project will consume an estimated 40,000 tonnes of steel, of which some 50 percent is constituted of rails,\" Mittal\'s spokesman Tami Didiza said in a written response to emailed questions from Reuters. \"Unfortunately the rail section sizes/steel specification prescribed is not available in South Africa, and the rails will have to be imported.\" Didiza said a significant volume of reinforcing steel would also be required for the concrete lining and reinforcement of tunnels, and concrete bridges. In addition, structural steel and roofing would also be needed for the stations as well as the electrical distribution network. \"Engineering work still to be completed will determine exact specifications. A fair part of these are expected to be in Mittal Steel\'s product range,\" Didiza said.
Mittal leads in the local supply of steel in South Africa, followed by smaller rival Highveld Steel & Vanadium. Construction will be by South African engineering firm Murray & Roberts and French firms Bouygues Travaux Public and RAPT Developpement are to build the train under the Bombela consortium.
The project was initially estimated to cost 7 billion rand, but an exact price tag is not yet finalised. A good portion of the final amount is expected to be allocated to buying steel.
Vallourec & Mannesmann invests in new China steel
Vallourec & Mannesmann Tubes has announced an investment in a major new steel-pipe mill to be build at Changzhou, in the eastern Chinese province of Jiangsu.
In a statement, the French company said construction of the new mill will start immediately and that on completion it is expected to generate turnover of 50 mln eur. An unnamed press official told XFN-Asia that the registered capital of the new company will be 20 mln usd but the total investment of the plant was not disclosed.
Vallourec said the new plant will produce high-value, seamless, large-diameter steel pipes aimed primarily at the electrical market and the construction and renovation of thermal power plants. China's mechanical and automotive markets will also be targeted. The company said the new plant will help to consolidate its leading position as the top supplier to the Chinese power generation industry
Severstal, RTL to Jointly Run REN TV
The RTL Group, which last week reached a deal to acquire a 30-percent stake in REN TV, will jointly run the Russian production and broadcast outfit with the new majority shareholder, the Severstal Group.
RTL Group will make available its professional experience and know-how to REN TV, a press release said. For the transition period until the completion of the new shareholder structure, a joint committee will coordinate all relevant shareholder and business matters with the current REN TV management.
Severstal is primarily a steel company, with 2004 revenues of $6.4 million. It is said to have close ties to the Russian government. In a statement, the two companies said they planned to maintain and strengthen REN TV as a leading independent Russian channel with a broad program offering of news and entertainment
Pakistan Government CCoP to decide on another UBL IPO
Federal Minister for Privatisation Aabdul Hafeez Sheikh said on Thursday the Cabinet Committee on Privatisation (CCoP) would decide whether undersubscribed initial public offering of United Bank Limited should be offered again or not.
The minister said the privatisation programme of the national entities was well on track and around half a dozens companies would be marked for sell-off within the next few months.
It includes PSO (Pakistan State Oil), Pakistan Steel, NIT (National Investment Trust), Karachi Shipyard and Mustehkam Cement, he said and gave no other details about the next privatisation deal. Earlier, Tehseen Iqbal Khan, secretary of privatisation, and Shoaib Malik, authorised representative for Attock Oil Group, signed the agreement for the sale of 51 percent (33,985,788) shares of NRL together with the transfer of management control.
He said Jalalabad had been selected as the first place for setting up these petrol pumps and Attock Group would be the first foreign company to take such initiatives in war-hit Afghanistan. staff report
Arcelor's German unit to buy steel ops from Nordwest Handel unit on Aug 1
Arcelor SA's German unit Arcelor Stahlhandel Holding GmbH is planning to buy Nordwest Handel AG unit Heller + Koester Stahl und Industriebedarf GmbH & Co KG's steel operations on Aug 1, Nordwest Handel said.
Heller + Koester yesterday signed a memorandum of understanding to sell the business to Arcelor Stahlhandel, it said.
No financial details were disclosed.
Heller + Koester's steel business has 90 employees and about 42 mln eur in annual sales
Posco Profit Rises 38%, Slowest Pace in Six Quarters
Posco, the world's fifth-largest steelmaker, said second-quarter profit gained 38 percent, the slowest pace in six quarters, as raw material costs rose and it cut prices because of competition from cheaper Chinese exports.
Net income rose to 1.26 trillion won ($1.19 billion) in the three months ended June 30, from 914.5 billion won a year ago, the Pohang, South Korea-based company said in a statement today. Sales rose 12 percent to 5.38 trillion won.
Posco cut its revenue target for this year to 23.6 trillion won from 23.9 trillion won forecast earlier, and maintained its production forecast at 31.3 million tons, the statement said.
Second-quarter profit compares with the 1.31 trillion won median forecast of 10 analysts surveyed by Bloomberg News. The profit growth is the slowest since the fourth quarter of 2003, when net income rose 27 percent from a year earlier.
Posco said on June 27 it will reduce stainless steel hot- rolled coil production by 80,000 tons in July and August, the first cut since it began production in 1989.
It cut prices of the product by 300,000 won a ton in May and lowered prices of some lower-grade steel by as much as 7 percent starting this month.
Net income this year may rise 26 percent to a record 4.83 trillion won, the Bloomberg survey showed, compared with an almost doubling of profit in 2004. Profit in 2006 may decline a further 16 percent to 4.1 trillion won, according to the median estimate of five analysts.
The company reduced debt to 2.99 trillion won from 1.88 trillion won
Bulgaria: Promet to export products in Spain
Steel plant Promet Steel AD, part of the international Steel Neva Consortium, has obtained a quality certificate by Instituto de Ciencias de la Construccion Eduardo Torroja, effectively clearing the way for the Bulgarian company to export products to Spain, said Promet spokesperson Alberta Alkalai- Dnevnik reports.
Moreover, Promet is in talks with the construction product certification authorities in Portugal, Austria and Germany.
The EU quality certificates are expected to boost the steel firm's output by 20 percent
MMK announced its operation results for June and the first six months of 2005
Last month MMK produced 145,100 tons of ready-to-use ore, 802,500 tons of sinter, 404,200 tons of coke, 729,100 tons of pig iron, 875,800 of steel and 853,500 tons of finished rolled steel. June's output of commercial steel products amounted to 790,800 tons.
In the first six months of 2005 MMK produced 720,900 tons of ready-to-use iron ore, 5,205,800 tons of sinter, 2,723,600 tons of coke, 4,606,400 of pig iron, 5,485,700 tons of steel and 5,247,200 tons of finished rolled products. In most products, with the exception of pig iron, the actual production was higher that the target figures but lower than last year's results. Year-on-year, in 2005 production of pig iron was 95%, and production of steel, 97.1%.
In June 50.1% of all the steel goods produced were shipped for export, while the average figure for the first six months was 51.8%.
An overall reduction of production volumes is observed in all the major steel making companies and in Russia as a whole. In the main kinds of products MMK keeps maintaining its leading position against the competition. MMK's share in the total Russian production of rolled steel in June stood at 19%, a testimony of the Company's outstanding contribution to the development of the national steel making sector.
KazakhMys and Companhia Vale do Rio Doce (CVRD) express mutual interest
The chairman of Kazakhmys corporation Ruslan Yun met with the Brazilian company representatives, the corporation press service stated.
The corporation officials noted, the meeting provoked mutual interest. The CVRD negotiators visited Annensk minery, Itauz open-cut mining of North Zhezkazgan minery, and Zhezkazgan copper plant.
The CVRD is a diversified company. The main spheres of its activity are iron ore extraction, copper production, black iron ore, gold, bauxite mining, manufacture of steel and aluminum, energy and transport sector.
The CVRD company is one of the top five mine enterprises, the world largest iron ore raw materials manufacturer and exporter. It conducts prospecting in Australia, China, Mongolia, and in the other countries
Clean air as blast furnace closes
The No. 5 blast furnace, which has been in operation for 47 years at the Beijing Shougang Group, one of China's leading steelmakers, has been shut down as an environment-protection measure, a top official of the group revealed.
Wang Qinghai, general manager of the group, said on Thursday that environmental authorities estimated that the shutdown of the No. 5 blast furnace will reduce the amount of discharged sulfur dioxide by 48 tons annually and discharged dust by 184 tons annually.
Liu Wanyuan, 79, the first person in charge of the operation of the furnace, said, "I have a deep affection for the furnace. But for a better environment in Beijing, it is a good thing to shut it down. Built in 1958, the No. 5 blast furnace was the first furnace the Shougang Group built after the founding of new China in 1949. The furnace produced 30 million tons of iron since it was put into operation 47 years ago.
The Shougang Group, also translated as the Capital Iron and Steel Co, was established in 1919 and is one of the country's largest steelmakers. Although widely regarded as a flagship enterprise in China's iron and steel industry, Shougang has been blamed for polluting the capital in recent years and is considered a potential obstacle for the upcoming 2008 Beijing Olympics.
In response to the criticism, the company, with approval from the State Council, launched an ambitious plan to relocate its polluting plants to Hebei Province. According to the plan, Shougang has cut its steel production and will further slash the annual output at its Beijing units to 4 million tons by 2007.
By 2010, all the current Beijing-based steel operations will stop and move to Hebei with only the headquarters, research and development sections, sales departments and logistics center staying in the capital. "The relocation will not be a simple duplication of transferring Shougang's pollution to Hebei," said Zhu Jimin, Shougang's board chairman.
The company is locating its new venue in Caofeidian, an island 80 kilometers south of Hebei's Tangshan City, and is committed to operating the 20-square-kilometer plant in an environment-friendly way with new equipment and techniques to improve efficiency and cut waste.
According to the Beijing Environmental Protection Monitoring Center, the air quality of the capital has steadily improved recently
Riverdale Mayor, commissioner blast Mittal
Riverdale Mayor Zenovia Evans has given up any hope of Mittal Steel USA expanding its plant in her community through a land swap with the Cook County Forest Preserve District. Now, she simply wants the steel giant to tell her and other local officials what the company's plans are for the facility, preferably with more notice than was given before the land deal was pulled from the table.
" ... I would think someone should have made us aware of their intent before, in person, rather than a voice mail at 2 p.m. on a Friday of a holiday weekend," Evans said Thursday of Mittal's announcement last week that the project was not in its plans. "After all the effort to achieve a land swap, this is a slap in the face," she said. Evans called the steel company's actions "akin to a breach of contract."
Fifth District Cook County Commissioner Deborah Sims speculated Mittal most likely closed the door on any hopes of trading 31 acres of land with the county in exchange for 21 needed to expand the facility.
Representatives from Mittal said earlier there wasn't a need to work out the land deal when the expansion was not certain.
Even if expansion wasn't set to occur immediately, Mittal could have acquired the land to expand later. That, according to Sims, is no longer a possibility. "I believe they have closed the door on an opportunity that will never happen again," she said. If Mittal considers expanding the plant later, Sims said the company should not expect the county to reconsider the land deal.
Officials were trying to negotiate the land swap since the days when Acme Steel Co. -- which went bankrupt in 2001 -- operated the plant. The village was stripped of more than $2 million in tax revenue when the plant went under. International Steel Group, Inc. bought the facility in a bankruptcy court auction in 2002. The deal for the land reportedly gained even more steam under ISG, when it was proposed in 2004.
Mittal purchased ISG in April.
The major issue now is the fate of the facility under Mittal, which currently accounts for about half of the village's roughly $4 million budget. "Mittal knew what ISG's plans were before they purchased this plant," Evans said. "The question remains, what is Mittal's plans for the Riverdale facility
Murchison selling WA iron ore to Asia
Continued strong demand for steel from northern Asia has benefited Perth-based junior Murchison Metals. It expects to sell all forecast iron ore from its developing Jack Hills project to Asian steel mills. Murchison announced it had secured two fixed price, fixed tonnage contracts with two Chinese steel mills, totaling almost 350,000 tonnes a year. The terms of the contracts were not disclosed but managing director Paul Kopetjka said Murchison had received fair value. The two contracts underwrite a revenue stream of $US30 million ($A40.58 million) for the first year of production.
"The market has softened over the last couple of months but this is typical for this time of year ... but the expectation is that the pricing will start to harden over the rest of the year," Mr Kopetjka said. "They are taking a bit of a punt and locking it in."
He said the company was in discussions with other mills, including some in Japan and Korea, for more fixed price, fixed tonnage contracts. "They are chasing long term supply. The can't get contracts with BHP Billiton as they are smaller mills."
Aside from the fixed contracts Murchison has a number of offtake agreements, totaling 1.6 million tonnes a year of iron ore.
The ore from the Western Australian Jack Hills project is direct shipping grade, which means it doesn't require any processing before it is shipped.First production is expected next year and drilling is continuing to convert enough resources into the higher confidence reserve category to support the first five years of production.
The company is considering expansion options to between 10 and 25 million tonnes of iron ore a year, including building a new port and railway.
S.Korean company to invest in Bangladesh
The Luxon Global Company of South Korea signed a memorandum of understanding (MOU) in Dhaka with Bangladesh's official Board of Investment (BOI) on Thursday for investing US$1 billion in energy, fertilizer and infrastructure projects.
The South Korean investment and development company intended to invest US$150 million in the development of coal mine, US$350 million for a coal-based power plant, US$150 million for a fertilizer factory, US$200 million for developing liquified natural gas facilities, gas transmission and related matters and US$150 million for projects like expressways and bridges, The New Age reported Friday.
President and Chief Executive of Luxon Seung Youb Lee, and BOI executive member Nazrul Islam signed the MOU.
The 350-megawatt power plant will be set up at the coal mine mouth as the government has decided that any company willing to explore coal in Bangladesh will have to install such a electricity plant near the field. The capacity of the gas-based urea fertilizer factory will be 30,000 tones per annum.
Bangladesh officials said they expect the company would start implementing their projects within the next 12-18 months
Questa Mine Might Be Sold
The Molycorp mine in Questa would become the property of China's state-owned oil company if the company's bid to buy Unocal Corp., Molycorp's parent firm, is successful. It's a prospect that has attracted the attention of New Mexico Attorney General Patricia Madrid.
On Wednesday, Madrid joined attorneys general from three other states in a letter expressing concern over last month's $18.5 billion takeover bid for California-based Unocal by the China National Off-Shore Oil Corp., known as CNOOC.
"The sale of a company, particularly an oil company like this with large potential liabilities, to a company controlled by a foreign government raises serious concerns," Madrid said in a statement released by her office.
Madrid noted that Molycorp -- which mines molybdenum, used to make steel -- has made commitments to state and federal government agencies to clean up its open-pit Questa site, "the proposed cost of which is likely to be in the many millions of dollars."
Venezuela, Italy Firms Reach Steel Deal
Venezuela's state-run Ferrominera del Orinoco and Italy's Danieli Spa signed an US $570 million (euro478 million) agreement Friday for construction of steel plant in eastern Venezuela, a government official said.
Deputy Industry Minister Valmore Vasquez said the factory will produce steel used for ship building in Venezuela, which is looking to expand its fleet of oil tankers
Brazil's Vale Debt Rating Raised to Investment Grade
Cia. Vale do Rio Doce, the world's largest iron-ore exporter, became the first Brazilian company to get an investment-grade rating as Moody's Investors Service boosted its rating one level.
Moody's raised the foreign bond rating on Vale Overseas, a unit which Vale sells debt through, to Baa3, the lowest investment-grade rating, from Ba1. Moody's said in a statement that Vale has a solid position'' in domestic and international iron ore markets and continued strong cash flow generation capability.''
Vale's rating is now four levels above the Brazilian government's B1 rating from Moody's. The higher credit rating will lower the cost of financing Vale's plans to spend more than 40 billion reais ($16.8 billion) to expand and build 42 steel mills, coal, nickel, copper and iron-ore mines through 2010, Vale President Roger Agnelli said at a news conference in Rio de Janeiro.
This investment grade rating comes at a great moment, when we are in the midst of our biggest expansion ever,'' Agnelli said. An investment grade lowers the cost of credit we need to finance that expansion and may allow us to increase the number of projects.''
Rio-based Vale has spent about $1.8 billion a year since 2000 in an expansion aimed at meeting soaring demand for metals in China, Europe and the U.S. Agnelli said today he expects demand in China for iron-ore to rise throughout 2005. In Europe, where demand for steel has fallen this year, an economic expansion should help the market recover by yearend, he said
CVRD wins small victory, launches offensive for trains
After winning a small victory this week, Brazil's iron ore mining titan CVRD, or Companhia Vale do Rio Doce SA (RIO), is mounting a tough offensive to fight for its right to buy iron from a local steelmaker and to control railways that move iron and steel to port.
Dofasco restarts No. 2 blast furnace in Hamilton after year-long rebuild
Dofasco has successfully started its No. 2 blast furnace, which was completely rebuilt over the last year to incorporate advanced iron making technology, the steelmaker announced Friday.
Used to reduce iron ore pellets into molten iron for further processing in the company's steelmaking facilities, the rebuilt blast furnace features several advancements over earlier designs.
Dofasco president and CEO Don Pether said the rebuild of the No. 2 Blast Furnace is part of an investment in the company's Hamilton operations that totals more than $1 billion, and includes a five-year, $700 million project to upgrade facilities throughout the company's Finishing Division.
"Our Hamilton operations are among the most efficient and technologically advanced of any steel plant in North America," said Pether. At its peak, the blast furnace rebuild employed more than 650 local contractors and has taken more than 1.1 million labour hours to complete.
Kickback scandal at tinplate manufacturer
Three members of the board of directors of a German tinplate manufacturer have resigned after being accused of misusing company funds.
Steel giant Thyssen-Krupp forced the three executives from its subsidiary, Rasselstein, to resign, the German daily Sueddeutsche Zeitung said Friday. The executives, among them Rasselstein`s CEO Konrad Noertersheuser, are accused of diverting company funds for private purposes, the newspaper said.
Rasselstein`s parent company has not publicly accused the executives. Thyssen-Krupp Steel has said Noertershauser has left Rasselstein for "private reasons." The other two managers, the company told the newspaper, are "simply switching positions due to normal job rotation."
With yearly sales of more than 860 million euros ($1.03 billion) and roughly 2,500 employees, Rasselstein is one of the three leading manufacturers of tinplate, which is used to produce tin cans, the newspaper said
